New Fort Worth initiative aims to connect more small business owners and nonprofits to loans – NBC 5 Dallas-Fort Worth

A new initiative launched Wednesday in Fort Worth aims to help more small business owners by enabling more people to access capital for businesses or affordable housing development projects.

The program is called Friendly CDFI Fort Worth. CDFIs are community development financial institutions, and the program will serve as a liaison between business owners, nonprofits and developers of affordable housing with flexible loans. Mark Pinksy of CDFI Friendly America said his model is focused on serving people in underserved communities across the country.

CDFIs have worked successfully in communities of color and other underfunded places for more than 30 years, according to the City of Fort Worth.

“It’s sort of becoming an investment vehicle for a lot of lenders and investors. These may be banks or other financial institutions. It can be corporations,” Pinksy said. “They collect all this money and pool it. They basically share the risk, and then CDFI manages the risk of lending money in communities that traditional financial institutions or traditional financial institutions don’t lend to.

At the launch on Wednesday, city leaders including Fort Worth Mayor Mattie Parker and Fort Worth Economic Development Director Robert Sturns highlighted the disparity in lending and financing among underserved communities.

“Fort Worth has really, for a long time, struggled frankly to focus on our communities that need us most. Above all, our black and Hispanic communities who have amazing businesses that are really faltering every month to succeed,” Mayor Parker said. “It’s frustrating because we know their capacity is much greater.”

When the pandemic began, Sturns said the city made an “aggressive effort” to secure nearly $55 million in CARES Act funding for small businesses. Although 30% of that funding went to minority-owned businesses, Sturns said he realized “there was still a significant gap to fill.”

“If you look at the data, look at anything about how small businesses are doing these days, you will find that minority-owned small businesses have been disproportionately affected by this pandemic and have historically had problems getting the right level of funding for their business operations,” he said on Wednesday. “You don’t have to look at the data, look at the trends to understand that businesses in our underserved areas aren’t thriving as well as they should.”

According to a 2010 U.S. Department of Commerce Report, businesses and minority-owned businesses are more likely to be denied loans. The same report found that minority-owned businesses that received loans were more likely to have higher interest rates.

“It’s for everyone. It’s for anyone who feels like they don’t have access to capital for what they want to do. We can’t necessarily fund everything, but we will fund everyone we can,” Pinksy said, explaining their mission. “The problem for us in Fort Worth is just a long history of people of color having difficulty accessing capital. It’s not just Fort Worth. This is true across the country. We see it all over the country. In effect, this means banks and CDFIs coming together to figure out how to make this financing work.

Jeremis Smith owns Legacy Construction Solutions and Legacy Wealth Management. Smith played basketball professionally for several years before retiring from the sport and returning home to Fort Worth, where he started his business.

“We have done projects near downtown Fort Worth. We own property in Chicago, Atlanta and partner with some DC businesses as well,” Smith said. “We need hope in Southeast Fort Worth. Hearing from an entity that is willing to help in a non-traditional way piques our interest. »

The city has committed $3 million to this effort. CDFI Friendly Fort Worth expects to see up to $250 million in new CDFI loans over the next five years.

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