US Small Business Administration (SBA) Administrator Isabella Casillas Guzman, joined by Vice President Kamala Harris, today announced a set of proposed reforms to the SBA’s Community Advantage Pilot Program that will expand access to credit for small businesses.
In a letter to the SBA, the National Community Reinvestment Coalition (NCRC) and the Opportunity Finance Network (OFN), organizations that advised SBA on changes to the Community Advantage Pilot Program, were joined by 91 community and national organizations in support of the proposed reforms. NCRC President & CEO Jesse Van Tol and OFN President & CEO Lisa Mensah attended the announcement at Howard University in Washington, DC.
“SBA’s proposed updates to the Community Advantage Pilot Program are an important and timely move to expand access to credit for small businesses, and to expand the reach and impact of the program,” Van Tol said. “The program should be expanded to include mission-driven lenders such as Community Development Financial Institutions (CDFIs) and Community Development Corporations. The economic impacts of the pandemic were devastating for small businesses – especially businesses owned by women, people of color, and other business owners who have traditionally lacked access to capital. As our nation looks toward economic recovery, the SBA remains an important partner for diverse small businesses and the specialized lenders who serve them. Community Advantage is an underutilized tool that can help lenders provide more capital to underserved entrepreneurs.
“The SBA’s shift in approach on criminal backgrounds is also important and more than symbolic. The use of ‘ever charged’ filters in lending applications needs to stop throughout the financial sector and it’s good to see SBA is no longer collecting criminal justice information as a part of the Community Advantage Program. We hope it will extend this policy to other SBA programs.”
“As our nation’s small businesses look towards economic recovery, the reform and expansion of the Community Advantage Pilot Program is a critical step forward in building a more inclusive economy,” Mensah said. “These changes will deepen the SBA’s partnership with CDFIs and other mission lenders – unlocking the program’s potential and increasing access to capital for underserved entrepreneurs.”
The reforms include:
- Extending the Community Advantage Pilot Program before it sunsets on September 30, 2022
- Lifting the Community Advantage lender moratorium to allow more mission lenders to access SBA loan guarantees
- Allowing Community Advantage lenders to use the same credit criteria and collateral policies used to underwrite similarly sized non-SBA loans
- Removing the current restriction that prohibits individuals with criminal backgrounds from accessing the Community Advantage program, and
- Increase the maximum loan size community advantage lenders can make to increase the impact for small businesses
To read the full letter, visit here.
The following organizations co-signed the letter:
Access to Capital for Entrepreneurs (ACE)
Accompany Capital
Affordable Homeownership Foundation Inc.
African American Alliance of CDFI CEOs
African American Chamber of Commerce of Montgomery County, Inc.
Albany Community Together (ACT)
AMPAC Business Capital
Appalachian Community Capital
Association for Enterprise Opportunity (AEO)
Association of Women’s Business Centers
B:Side Capital
Bankers Small Business CDC of California
Bitwise Industries
BLDG Memphis
Brooklyn Alliance Capital Lending Programs
Business Outreach Center Network
California Coastal Rural Development Corp.
Capital Impact Partners
Carolina Small Business Development Fund
CDC Small Business Finance
Center for Rural Affairs
Cherry Community Organization
Coastal Enterprises, Inc.
Common Capital, Inc.
Community Investment Collaborative
Cooperative Fund of the Northeast
DC Women’s Business Center
Delaware Community Reinvestment Action Council
Detroit Development Fund
Devotion USA, Inc.
DreamSpring
Entrepreneur Works
Evergreen Business Capital
Fair Finance Watch
Family Housing Advisory Services
FORGE Community Loan Fund
Georgia Advancing Communities Together, Inc.
Gusto
Harlem Entrepreneurial Fund
Hmong Wisconsin Chamber of Commerce
Homeownership Council of America
Housing Opportunities Made Equal of Greater Cincinnati
Impacto Fund Inc.
Jane Place Neighborhood Sustainability Initiative
Justine Peterson
La Fuerza CDC
Lendistry
LiftFund
Local Enterprise Assistance Fund (LEAF)
Michigan Oncology Quality Consortium
Micro Enterprise Services of Oregon (MESO)
MoFi
Mountain BizWorks
Mustard Seed Development Center
National ACE
National Association for Latino Community Asset Builders (NALCAB)
National LGBT Chamber of Commerce
National NeighborWorks Association
Neighborhood Community Development Fund
NeighborWorks Western Pennsylvania
New Town Loans, LLC
Northern Initiatives
Pacific Asian Consortium in Employment (PACE)
Pacific Coast Regional Small Business Development Corporation
Pacific Community Ventures
Partner Community Capital, Inc.
Pathstone Enterprise Center, Inc.
Pathway Lending
People Fund
People Trust Community Loan Fund
Philadelphia Association of Community Development Corporations
Prosperity Now
Public Private Strategies Institute
REBOUND, Inc.
ResilNC
SLEHCRA
Small Business Majority
Social Impact Strategies Group
South Dallas Fair Park Innercity Community Development Corporation
Southern Dallas Progress CDC
St. Petersburg Neighborhood Housing Services, Inc. dba Neighborhood Home Solutions
TMC Community Capital
TruFund Financial Services, Inc.
U.S. Black Chambers, Inc.
Universal Housing Solutions CDC
US Hispanic Chamber of Commerce
Utah Microloan Fund
Washington Area Community Investment Fund (WACIF)
Wisconsin Women’s Business Initiative Corporation (WWBIC)
Women’s Economic Ventures
Women’s Opportunity Resource Center
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About NCRC
The National Community Reinvestment Coalition and its grassroots member organizations create opportunities for people to build wealth. We work with community leaders, policymakers and financial institutions to champion fairness in banking, housing and business. NCRC was formed in 1990 by national, regional and local organizations to increase the flow of private capital into traditionally underserved communities. NCRC has grown into an association of more than 600 community-based organizations in 42 states that promote access to basic banking services, affordable housing, entrepreneurship, job creation and vibrant communities for America’s working families. More: www.ncrc.org
About OFN
Opportunity Finance Network (OFN) is a leading national network of more than 360 community development financial institutions (CDFIs), specialized lenders that provide affordable, responsible financial products and services in low-income rural, urban, and Native communities nationwide. As a trusted intermediary between CDFIs and the public and private sectors, OFN works with its partners – banks, philanthropies, corporations, government agencies and others – to create economic opportunity for all by strengthening and investing in CDFIs.
Media Contacts:
Alyssa Wiltse
NCRC
awiltse@ncrc.org
202-393-8309
Jennifer A. Vasiloff
OFN
jvasiloff@ofn.org
202-618-6096
