Our guest today is Eric Weaver. Eric is a nonprofit executive who brings over three decades of experience in community economic development and community development finance. In 1992, he founded what is now the nation’s leading nonprofit small and microbusiness lending CDFI—Opportunity Fund (now Accion Opportunity Fund).
When Eric stepped down as CEO in 2017, Opportunity Fund was the most extensive microloan portfolio under management among U.S. nonprofit lenders at over $100 million. The company has also been a leader in Individual Development Accounts, Affordable Housing lending, New Markets Tax Credit-lending, and advocates for curbing irresponsible and predatory small business lending.
Last year, Opportunity Fund surpassed $1 billion in cumulative community investment - over $500 million in small and microbusiness loans, with the rest being financing for community facilities through the New Markets Tax Credit Program, loans to finance affordable housing, and direct cash incentives to help low-income people save money. Today, Opportunity Fund lends in 45 states through an innovative referral partnership with fintech lender Lending Club. The average loan size is $30K, with most loans going to low-income entrepreneurs, entrepreneurs of color, and women entrepreneurs.
The big question some of you may be asking is, what is a CDFI? A Community Development Financial Institution is primarily invested in support of their surrounding communities. They do have to be government certified to apply for annual grants allocated through a fund within the treasury department. The CDFI’s then provide term loans for small businesses, nonprofit facilities, and affordable housing.
Not all CDFI’s are the same though, be aware that their credit standards can vary widely. In the SBA’s microloan program, they lend money to the CDFI’s who then help the capital get to underrepresented small business owners. CDFI's can be an excellent alternative for entrepreneurs who may not meet bank standards. With the pandemic, Eric says that there is a lot more attention coming into the space than before, and he's concerned about CDFI's capacity to handle all the new interest.
Listen Here to Learn More about CDFI’s: https://bit.ly/3AOUzcF