Prepared in partnership with P2 Advisors, this new study explores small business lending services provided by federally certified Community Development Finance Institutions (CDFIs) and state certified Community Development Corporations (CDCs). Through a survey of 22 CDFIs and CDCs, we find these organizations doubled capital deployment to Massachusetts’ underserved small business with federal recovery funds. However, the sector remains relatively small compared to leading states and it faces significant long-term funding challenges with federal resources spent down. The report offers a cross-sector strategy to capitalize the community finance sector and grow the impact of CDFIs and CDCs in Massachusetts.
Community Capital for Small Businesses
A Study of the CDFI and CDC Ecosystem in Massachusetts
Key Takeaways
- Community development finance institutions (CDFIs) disproportionately serve the smallest and youngest businesses and those owned by underrepresented groups.
- Only 23% of CDFIs provide financing to small businesses. Most funding from CDFIs and community development corporations (CDCs) goes to the real estate sector.
- 32 states have CDFI funding programs, providing a model for how MA could establish stable and sustainable lending opportunities for small businesses.