September 30, 2015
Minneapolis, MN - (September 30, 2015) Minneapolis-based Community Reinvestment Fund, USA (CRF) today launched its Connect2Capital online small business lending platform, which is being piloted in the Twin Cities. Connect2Capital was developed in response to the rapid growth of online lenders, a number of them offering quick access to high interest rate loans and spending enormous sums on marketing. With Connect2Capital, CRF hopes to break through the crowded and potentially confusing marketplace to help educate prospective borrowers that there are other, more responsible and affordable, alternative online financing options.
"As a non-profit small business lender with more than 25 years of experience helping entrepreneurs access the capital they need to grow and create jobs, we are concerned how the online lending market is negatively impacting many small businesses.," said Frank Altman, President and CEO of CRF. "With Connect2Capital, we are providing online access to affordable and responsible financing in the Twin Cities. And if we can't help them, we can hopefully point them to one of our local lending partners who can."
Altman said that CRF plans to expand Connect2Capital to other areas of the country and eventually create an online marketplace, with small business loan products from other responsible non-profit small business lenders who share a commitment to improving their communities.
Background: The Small Business Administration says evidence suggests that small business owners were the hardest hit during the great recession and despite the economic recovery, access to financing remains a key challenge. According to the Federal Reserve Bank, 44 percent of credit applicants reported they received none of the funding they were seeking from traditional sources such as banks. Over the past few years, a new online marketplace has developed to take advantage of the gap in access to capital. According to Forbes Magazine, the portfolio balance of online lenders has been growing about 175 percent a year, compared to a decline of about 3 percent in the traditional banking sector. It is estimated that more than $6 billion of online loans were funded in 2014.
About Community Reinvestment Fund (CRF)
CRF, a national non-profit community development financial institution (CDFI), is a leader in bringing capital to underserved areas. Since 1988, CRF has injected more than $1.8 billion into low-income and economically disadvantaged communities in 47 states around the country to provide affordable housing, help stimulate job creation and economic development, and support community facilities. CRF holds one of 14 national, non-bank SBA 7(a) lending licenses, is one of the top 100 SBA 7(a) lenders and is a preferred lender under the SBA 7(a) Preferred Lenders Program. For more information, visit www.crfusa.com.
Posted by: CRFUSA