CBA Fund, CBA's Community Development Financial Institution Intermediary, is excited to announce a new funding opportunity for nonprofit lenders whose headquarters are located in designated CDFI Fund Equitable Recovery Program geographies.
CDFI ERP Eligible Geographies are those areas that meet one of the following criteria:
- Census tracts that demonstrate severe impact from the COVID-19 pandemic, have a median income at or below 120% of the area median income, and are CDFI investment areas; or
- Native areas.
Areas of consideration include all 50 states, the District of Columbia, and Puerto Rico.
Please download and review these instructions for determining your organization's eligibility for this funding before you complete the loan and grant application.
CBA Fund is providing loan capital, capacity building grants, and technical assistance to nonprofit lenders so they can offer affordable small dollar consumer loans (SDCL) to low- to-moderate income in their communities. This support comes as a package (applicants should plan to apply for both loan capital and grant funds). We invite organizations to read through the criteria below and apply by August 16, 2024.
We consider people to be low- to-moderate income (LMI) individuals if they earn less than 80% of Area Median Income (AMI).
Loan capital: We are providing up to
$150,000 in loan capital with a repayment period of two or three years. The loan comes with a 1% origination fee and an interest rate of 2% or 3%. (See more about the terms in loan application.)
Grants: The loan capital comes with a
capacity building grant of up to $8,000 that can be used for any costs associated with your consumer lending program.
Technical Assistance: CBA Fund TA is based on your needs and our capacity to meet those needs. You will also participate in cohorts that meet to share best practices and problem solve issues related to small dollar consumer lending. You will also participate in a cohort with other lenders and meet quarterly to share best practices and problem solve issues related to small dollar consumer lending.
Eligibility Criteria
To be eligible for funding your organization must:
- Be a 501(c)(3) nonprofit organization, credit union, or Native agency
- Currently be a CBA member in good standing or are willing to become one
- Demonstrate the ability to use funds for an existing or new small dollar consumer loan program.
Note: We define SDCLs as loans used for personal stability uses/household purposes. These loans can be of any size, but loans that are $2,500 or less are preferred. SDCLs can include but aren't limited to: payday loan alternatives/refinance loans, emergency loans, credit builder loans, home repair loans, assistive technology loans, auto loans, etc. Our definition does NOT include small business loans or mortgages.- Currently report or are willing to report the loans to the major consumer credit bureaus.
- Have or have started the processes to get the appropriate state lending license(s) to provide consumer loans as required or can prove that your organization is exempt from needing one. Reach out to cbafund@creditbuildersalliance.org for assistance.
- Offer loan terms that are affordable, flexible, and conducive to credit building
- Total APR of 36% or less
- Loan term is at least six months
- Offer options for payment modifications/flexibility as feasible, as demonstrated in your loan policies and procedures
- Be in good financial standing according to past audits (if available) or independently reviewed financials and current year-to-date financials and budget/projections.
- Have the ability to track individual credit score outcomes, and able to provide basic information on program outputs and outcomes throughout the grant period or be willing to set up to do this.
- Be able to disburse around 75% of the capital received within a year of receiving it. We provide some flexibility for those starting a new SDCL program.
Priority Criteria
CBA Fund will prioritize funding to organizations that:
- That serve BIPOC communities and are led by the populations they serve
- Demonstrate a commitment to racial equity within their organization and through their loan program
- Have a strong plan for use of funding
- Are offering an accessible and affordable loan product that:
- Was designed with community input
- Is meant to reach people in your community who have limited access to capital
- Utilizes equitable underwriting criteria and flexible but standardized loan servicing policies
- Provide additional support to borrowers along with the loan
Applications are due by 8/16/2024. If your organization meets the criteria, we encourage you to apply!
The first step is taking the eligibility quiz (click next page). All applications will be rated by a panel of reviewers using the eligibility and priority criteria listed above. CBA Fund will notify applicants of our decision by 9/30/2024. The grant period is one year, but we will request outcome data for the full term of the loan. You can contact cbafund@creditbuildersalliance.org with any questions.