Creating Opportunity With Community Development Financial Institutions (CDFIs)
At BodeTree Platform, we understand that the role of small business is deeply woven into the fabric of the American economy. With 30 million small businesses operating across the country, the aspiration of building a business is no longer considered a far-fetched fantasy, but a very tangible reality. This reality has materialized in the form of the 600,000 plus franchised small business and the 66% of all new jobs created by small businesses in the marketplace.
We recently returned from Opportunity Finance Network’s Small Business Finance Forum in Chicago, where we had the chance to speak with influential CDFIs and impact investors serving their local communities. The Small Business Finance Forum provided a unique opportunity to connect with an influential group of CDFIs working to create a better lending environment for small businesses with more transparency for borrowers and better tools for CDFI and lending partners.
Our conversations at the OFN summit provided a stimulating discussion around the opportunities of small business lending and community investment, as well as the array of options available for capital lending.
Opening Up Opportunity & Encouraging Financial Sustainability
CDFIs were created and are funded to serve a distinctive niche of the population. This population is a diverse assembly of businesses operated by women, minorities, low-income and rural demographics, comprising largely of businesses that would not otherwise qualify for traditional bank loans or are in need of capital in smaller denominations or microloans. CDFI’s altruistic business model is concentrated on creating value for their target community and investing in opportunities that would otherwise be unsupported by traditional, risk adverse financial institutions.
Through our conversations at the Small Business Finance Forum, we discovered the two-fold approach to lending by these CDFIs, as they complement their lending practices with technology resources and financial education for their small business borrowers. As the saying goes, “give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” CDFIs create the framework and foundation for success so these small businesses can be ideal future lenders for more traditional institutions in the future. Additionally, they teach small business owners how to be successful after the life of the loan, when the partnership and backing have concluded.
BodeTree perfectly bridges the relationship between the CDFI lender and small business through technology infrastructure and financial education. BodeTree is an easy-to-use, financial management tool that delivers all the necessary financial information in an automatic and digestible format. Gone are the days where a business owner is forced to divert from their daily operations to manage their financial information or spend countless hours instructing their CPA on the intricacies of their financial components. BodeTree allows you to cut out the difficult and expensive accounting processes without compromising the quality of information or service provided by a traditional accounting service. Additionally, the platform encompasses an education center to answer common questions about financial management and business best practices, a useful complement to the technical and educational assistance CDFIs are mandated to provide.
Creating Financial Fluency For Small Business
Our conversations at the OFN conference were inspiring as it was clear how powerful our complementary missions could be. By providing opportunities for financial fluency, rather than just funding, BodeTree alongside CDFIs and mission-based lenders create a platform for moving small businesses forward towards their goals.
The next blog in our financial partners series will discuss the important role of community banks in the small business landscape. Sign up for our e-newsletter today to be notified when it’s live!
