If you’re a small business owner looking for capital, you may want to consider looking into Community Development Financial Institutions, or CDFIs—organizations that specialize in lending to small businesses. While approval rates are higher than at traditional banks, there are pros and cons. Check out our infographic to learn more about whether a CDFI fund might be right for your business.
CONSIDER A CDFI
It can be tough for a small business to get access to credit—but it can be easier if you know where to look. According to the Federal Reserve Small Business Credit Survey, in 2016, 77% of small business applicants for loans or lines of credit at Community Development Financial Institutions (CDFIs) were approved.
SO WHAT IS A CDFI AND COULD ONE HELP YOUR SMALL BUSINESS?
CDFIs are lenders that help certain small business owners gain access to capital.
Banks, credit unions, loan funds, microlenders or venture capitalists may serve as CDFIs.
HOW THEY WORK:
BORROWING THROUGH A CDFI IS DIFFERENT THAN SECURING A BANK LOAN OR LINE OF CREDIT. CDFIs OFFER CERTAIN PROS AND CONS.
1 Federal Reserve Small Business Credit Survey, 2016
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