Microfinance in the U.S.

Presented by Susan Lamping

CDC Small Business Finance

Overview of Presentation

• About CDC Small Business Finance• Microfinance review• Microfinance Organizations and Programs• Strategic Partnerships• Role of Microfinance Organizations• Bank Financing vs. Microfinancing• Resource Development• A Typical Microfinance Client• A Success Story• Questions

About CDC Small Business Finance

• CDC’s are financial intermediaries certified by the SBA to administer SBA commercial real estate loans.

• There are 266 CDC’s in the USA.• CDC Small Business Finance has been in operation

since 1978 and is the nation’s largest CDC. We have a staff of over 60 professionals and manage a loan portfolio of over $1.7 billion, with over 3,500 loans.

• CDC administers a varieties of loan programs to meet entrepreneur’s needs.

• Some Stats…

Microfinance- Review

•What have you learned about Microfinance so far and what questions do you still have?

Types of U.S. Microfinance Organizations/Programs

• Credit vs. Training led.• Poverty Elimination.• Private non-profits as direct lenders.• Bank Consortiums.• Government Funded programs.• SBA Micro Lenders.• Target market organizations.• Geographic Based. • Bank Partnerships.

Strategic Partnerships• Business training organizations (ie- SCORE

and the SBDC’s).

• Chambers of Commerce.

• Other Loan Programs to leverage access to capital.

• Loan Guarantee programs (State Loan Guarantee Program, Cal Cap)

• Bank Partnerships (for marketing and lending).

Roles of Microfinance Organizations

• Provide access to capital.

• Training.

• Financial literacy.

• Resource for other services.

• IDA Administration.

• Support/Encourage.

Bank Financing vs. Microfinancing

– Traditional areas of evaluation• Credit of all principal business owners

• Capacity to repay loan• Collateral • Capital• Conditions (Economic, Industry)• Experience in the Industry• Business Plan,/Projections

– Character Lending

Resource Development

• Earned Income• Sources of Capital

– Government (Local, State and Federal)– Banks– Private Parties– Strategic Partnerships to Leverage Resources

• Challenges of Limited Resources• Sustainability/Self Sufficiency

A Typical Microfinance Client• A refugee.• A recent immigrant.• A young person.• Lacks credit history.• Has poor credit from a couple year’s past.• Lacks collateral.• Start up businesses.• Businesses with a ‘story’.• Industries served: children’s resale shop, bookkeeping service, cleaning business,

coffee shop, carpet cleaning, toy store, online children’s décor, medical supply company, surveying company, pool cleaning, soccer school, chiropractor, esthetician, hair salon, Hospice agency, limo company, manufacturing business, yogurt shop, adult daycare for developmentally disabled.

Client Success StoryDr. Clark’s Store, owner Oskar Thorvaldsson

Ending Remarks

One practitioner’s opinion…

Contact Information

Susan LampingSenior Community Loan Officer

Main line: (619) 291-3594 ext. 8639 Direct line: (619) 243-8639

slamping@cdcloans.com

CDC Small Business Finance2448 Historic Decatur Road, Suite #200

San Diego, CA 92106