U.S. Bank has teamed up with Community Reinvestment Fund USA (CRF), a non-profit organisation, to expand access to credit for small businesses that do not qualify for traditional credit products.
Referral agreement between banks and individual CDFIs commonly in practice, but this programme uses technology to streamline and increase the number of small businesses served by Community Development Financial Institutions (CDFIs).
Under the agreement, CRF will deliver Connect2Capital platform that will match small businesses in need of credit with flexible sources of financing from CDFIs.
CRF founder and CEO Frank Altman said: “CRF has more than 30 years of experience investing in communities and small businesses to create jobs and economic vitality.
“With our new U.S. Bank partnership, together we’re helping to fulfill our mission of empowering people to improve their lives and strengthen their communities through innovative financial solutions.”
U.S. Bank metropolitan bank division manager Steve SaLoutos said: “We think of Connect2Capital as an online matchmaking service for borrowers and CDFI lenders. Any time we can support mission-driven lenders that strengthen local economies in the communities where we do business, it benefits the entire financial ecosystem.”
Approximately 28.8 million small businesses accounted for over 63% of the net new jobs created in the US between 1993 and 2013. However, the most common challenge these small businesses face was availability of credit for expansion, a survey conducted by the Federal Reserve Bank found.