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Robert Boyle from Justine Petersen talks about CDFIs

CDFIs: Supporting Underserved Communities

Mary introduced Robert Boyle from Justine Peterson, a CDFI in St. Louis, to discuss the importance of CDFIs for startups. Robert explained that CDFIs, or Community Development Financial Institutions, were established by the U.S. Department of Treasury in the mid-90s to assist underserved communities and business owners. He mentioned that CDFIs come under the CDFI Fund and can provide various financial services, including New Market Tax Credits, to support community development and small businesses.

CDFI Funds for Small Businesses

Robert explained the role of CDFI funds, specifically Great Rivers Community Capital and Justine Petersen Housing and Reinvestment Corporation, in providing financial support to small businesses and startups. He highlighted that CDFIs offer more flexibility than traditional banks, including the ability to fund startups that banks may not support. Robert also mentioned that CDFIs can transfer credit to banks after a few years, making them a valuable resource for early-stage businesses.

CDFI Support for Small Businesses

Mary shared her experience securing a microloan from a CDFI to fund equipment for her startup video production company, highlighting the importance of such financial support for small businesses. Robert confirmed that CDFIs offer lines of credit and other financial services, though he noted that lines of credit are often not used as intended due to repayment challenges. He also mentioned that CDFIs provide workshops, mentoring, and support services to help businesses manage financial peaks and valleys, with a focus on restructuring loans when necessary.

CDFI Loan Restructuring Services

Mary and Robert discussed the CDFI's ability to restructure loans for clients facing financial difficulties, such as family emergencies or deaths, due to their regulatory flexibility. They highlighted the importance of offering services like loan restructuring, lunch and learns, legal clinics, and will and trust advisory to support small business owners in managing their assets and financial challenges.

CDFIs and Business Credit Support

Mary and Robert discussed the importance of CDFIs in providing financial support to small businesses, emphasizing the benefits of step-up lending and its impact on business credit. Robert explained that most startups focus on personal credit initially, while business credit becomes more significant as the business matures.