SANTA ANA, Calif. – Two member agencies of The Association of Financial Development Corporations recently celebrated the collective award of nearly $900,000 in federal grants that will assist their efforts in building up underserved communities and connecting small businesses with needed capital and resources.
On Feb. 28, the U.S Department of the Treasury announced that its Community Development Financial Institutions Fund had allocated $194.1 million in Financial Assistance awards to 252 Community Financial Development Institutions, or CFDIs through the 2022 fiscal year which ends June 30. The awards are allocated through the CDFI Program and Native American CDFI Assistance Program rounds.
Two of the CDFIs, California Coastal Rural Development Corporation based in Salinas and California Capital Small Business Financial Development Corporation in Sacramento respectively received $560,000 and $325,000 in Base Financial Assistance (FA) awards. The grants are intended to “enable CDFIs to substantively expand lending and investment activity in disadvantaged and distressed neighborhoods and communities,” a U.S. Treasury release states.
“These CDFI FA grants will be used to increase our organizational capacity and to provide additional capital to towards increasing our CDFI lending activities within our CDFI approved target markets, which are typically low-to-moderate income census tracts and underserved investment areas,” said Lee Takikawa, president and chief executive officer of California Coastal Rural Development Corporation.
Base Financial Assistance awards of up to $1 million are allocated with the requirement that awardees match the funds with non-federal sources. FA awards can be used for lending capital, loan loss reserves, capital reserves, financial services, and development services to increase products and services, implement new offerings, expand operations, and serve new populations, according to CDFI award information. Three supplemental award categories are also available to Base FA awardees addressing poverty, disability and nutritional needs.
Community Development Financial Institutions, certified at the state or federal level, are mission-driven to provide affordable financial products and services toward bolstering economically underserved areas. California Coastal and California Capital hold federal certification and are also members of The Association of Financial Development Corporations based in Santa Ana. The association is comprised of seven financial development corporations located around the state that function as nonprofit entities under the California Infrastructure & Economic Development Bank which finances public infrastructure and private development through a variety of products and services including its flagship Small Business Loan Guarantee program established in 1968.
The U.S. Treasury’s February announcement follows an earlier release last September communicating the award of $27.57 million to 218 organizations around the country to aid with technical assistance activities such as equipment purchases, hiring of consultants, salary and benefits payments and training. Small Business Development Corporation of Orange County, one of the state’s seven financial development corporations and headquarters for the corporations’ association received $125,000 in a technical assistance grant for the 2022 fiscal year. It was the only technical assistance grant awardee in Orange County following a competitive application process.
“I am extremely proud of our association members’ achievements in receiving these substantial Financial Assistance awards as it is a reflection of their hard work in building up their communities and aiding underserved small businesses,” said financial development corporation association president Michael A. Ocasio. He is also president and chief executive officer of the Small Business Development Corporation of Orange County. “Our development corporations all play a vital role in the state’s economic wellbeing and grant awards such as these are instrumental in our ability to sustain and expand our services,” Ocasio said.