What Is a CDFI and How Can It Help to Fund Your Small Business

A Community Development Financial Institution (CDFI) is a mission-driven lender certified by the U.S. Treasury. It channels capital into communities where traditional banks may not have offerings. A CDFI is not just for profit but also designed for economic opportunity.

For a small business, a CDFI can extend that lending lifeline. A CDFI may offer funding options for borrowers with a thin credit profile, a lower credit score, an unfavorable industry such as food and beverage or logistics, smaller loan amounts, or younger companies that traditional banks and credit unions are not ready to support. Further, CDFIs sometimes pair education with funding or operate funding programs for government institutions.

For a start-up or a company with less than 2 years of revenue, talking to a CDFI for funding is a wise place to start.