SANTA ANA, Calif. – Three member agencies of The Association of Financial Development Corporations (TAFDC) will receive a total of $4.7 million in grant awards this summer aimed at further assisting vulnerable small businesses, farms and communities hardest hit by the COVID-19 pandemic.
California Coastal Rural Development Corporation based in Salinas, California Capital Financial Development Corporation in Sacramento, and PCR Business Finance in Los Angeles were among 604 organizations awarded funds this year from the U.S. Department of the Treasury in response to ongoing economic impacts caused by the pandemic. The grant-winning organizations are certified with the Treasury as Community Development Financial Institutions (CDFIs) which are federally designated to provide affordable financial products and services to small businesses, entrepreneurs, nonprofits, community organizations and homeowners in economically underserved areas. Grant funding is awarded through the CDFI Equitable Recovery Program and is anticipated to arrive in June or July.
“That means increased capacity to serve those that have nowhere else to turn.” — Mark J. Robertson, PCR Business Finance
The economic impact grants from the Treasury’s Community Development Financial Institutions Fund, announced in April in a press release, totaled more than $1.73 billion. The awards represent the largest CDFI grant program in history, the release states, quoting Vice President Kamala Harris.
Leaders of the association’s three financial development corporations said they look forward to broadening the impact of their services to help those most in need.
“My initial reaction to the news of our $1.6 million award was excitement for the increased capacity that this grant represents,” said Mark J. Robertson, Sr., president and chief executive officer of PCR Business Finance. “That means increased capacity to serve those that have nowhere else to turn.
“As a CDFI, our plan is to make small business loans up to $50,000 to underserved small business owners,” Robertson said. “These include businesses owned by women and minorities, and those owned by low-moderate income (LMI) persons, employ LMI persons, or are located in LMI areas. The funds could also be used to fund a portion of a larger loan, to broaden the impact of the award.”
He noted that a portion of the grant can be allocated for administrative funding, which allows for staffing and other expenditures, “but more importantly the award provides new capital to be loaned to small business owners that have few, if any, alternative funding sources,” Robertson said.
“Cal Coastal was thrilled to obtain additional capital during a time of economic and financial turmoil,” said Lee T. Takikawa, president and chief executive officer of California Coastal Rural Development Corporation.
Cal Coastal received a grant award of about $2.5 million. It will use the funds to support its financial products and continue lending activities to underserved areas in its CDFI approved target market, Takikawa said. “A small portion would be utilized to build operational capacity to support our lending and technical assistance services. However, the majority of our CDFI grant award proceeds will be used to support our direct farm loans and our SBA Community Advantage loans,” he noted.
“Cal Coastal was thrilled to obtain additional capital during a time of economic and financial turmoil.” — Lee T. Takikawa, California Coastal Rural Development Corporation
“California Capital Financial Development Corporation is gratified by the support from CDFI”, said Deborah Lowe Muramoto, president and chief executive officer of California Capital. “The $608,000 CDFI Economic Recovery Program grant award will be important in allowing California Capital’s continued growth and need for the capacity to increase lending and providing development services for business in low income, underserved communities, and communities of color. This funding comes at a very critical time where small and microenterprise businesses are struggling to recover from the impacts their businesses sustained due to the COVID-19 pandemic. California Capital is pleased to be a part of the solution in assisting small businesses in northern California.”
Low and middle-income communities bore the brunt of income loss during the COVID-19 pandemic and continue to struggle to regain their economic footing, reports indicate. A January 2023 article by the National Federation of Independent Business Inc. states that local economies have not fully returned and small businesses currently struggle with staffing and inflation issues as they continue to recover from the pandemic’s economic impacts.
“This funding comes at a very critical time where small and microenterprise businesses are struggling to recover…” — Deborah Lowe Muramoto, California Capital Financial Development Corporation
California Coastal, California Capital and PCR are among seven Financial Development Corporations which comprise the TAFDC. They operate under the California Infrastructure and Economic Development Bank, called IBank. The corporations are nonprofit entities whose various capital access initiatives, including the state’s flagship small business loan guarantee program, are intended to assist small businesses, entrepreneurs, nonprofits, and farmers, particularly those located in underserved communities and owned by people of color, women, veterans, or the disabled.
“It is so encouraging to see our federal partners recognizing the need we are all witnessing and experiencing and stepping up to provide substantive financial support for hundreds of CDFIs including our member organizations,” said Michael A. Ocasio, president of The Association of Financial Development Corporations. “Our FDCs are so dedicated to making a difference, and these funds will go far in helping our three CDFI grant recipient agencies further broaden that impact.”