GA Funding for CDFIs is designed to provide access to capital to small businesses to create job opportunities in low-to-moderate income, minority, and other underserved communities, including women and minority-owned small businesses. The CDFIs currently operating in Georgia are positioned in the metro and rural underserved communities around the State of Georgia and have established relationships with local banks, local chambers of commerce, economic development authorities and small business owners that are recognizing the need for job creation on a local or personal level. By partnering with Banks, the CDFIs plan to leverage the SSBCI funds 10:1 over the life of the program.
In the GA Funding for CDFIs program, DCA will enter into a performance-driven, contractual relationship with CDFIs. The CDFIs will assist the State of Georgia by making SSBCI funds more accessible to small businesses through the following processes/benefits:
Federally designated CDFIs may participate in the Georgia Funding for CDFIs program through one of two options: 1) as a loan originator/servicer, or 2) as a contracting entity in a direct lending capacity. In the case of the contracting entity, the State will advance SSBCI funds directly to the CDFI on a loan-by-loan basis. Upon receipt of the SSBCI funds, the CDFI immediately funds the loan to the small business. When loan principal and interest are paid back, the contracting entity CDFI may retain the funds and relend them into new SSBCI projects, subject to federal and state SSBCI regulations. Participation as a contracting entity/direct lender CDFI generally will be reserved for qualified non-profit, non-depository CDFIs. In the case of loan originator/servicer CDFIs, the State will advance SSBCI loan funds directly to the small business after the CDFI has originated and enrolled the loan. When SSBCI loan principal and interest are paid, the originator/servicer CDFI remits the funds to the State. Participation as an originator/servicer CDFI is available to qualified for-profit or non-profit, affiliated-depository CDFIs (as well as qualified non-profit, non-depository CDFIs).
All CDFIs participating in the Georgia Funding for CDFIs program will be responsible for monitoring enrolled loans, servicing loan payments, and submitting quarterly and annual SSBCI funding reports to the State, and will earn fees for providing these services. CDFIs under either option are required to sign a Lender Program Participation Agreement with the State upon approval as a participating lender in the Georgia Funding for CDFIs program.