Senator Patrick Leahy (D-Vt.), Senator Bernie Sanders (I-Vt.) and Representative Peter Welch (D-Vt.) announced Monday that three Vermont organizations have received $1.15 million in federal funds from the U.S. Treasury Department’s Community Development Financial Institutions (CDFI) Fund. The grants will enable financial institutions to provide business development support and increase lending and investment activity in low-income and economically distressed communities.
The CDFI Fund awarded $187.3 million in grants and loans to 357 community credit unions, loan funds and other financial institutions across the country that provide affordable financial products and services in economically distressed areas.
Three Vermont programs received funds through these awards:
- The Flexible Capital Fund, L3C, received $125,000
- Opportunities Credit Union received $375,000
- Vermont Community Loan Fund Inc. received $650,000
In a joint statement, Leahy, Sanders and Welch said: “These awards will bring key resources to community based initiatives in Vermont that are focused on alleviating poverty and advancing social justice – issues that are especially important during the current health and economic crisis. Opportunities Credit Union, VCLF and the Flexible Capital Fund have a proven track record of using federal funds to improve the lives of Vermonters. Because of their work, more Vermonters will have access to safe and affordable housing, childcare, small business capital and health care.”
Leahy, the Vice Chairman of the Senate Appropriations Committee, has long been an advocate for the CDFI program. The program has played an important role in Vermont’s economy by investing in small businesses, families and neighborhoods that would not have access to the capital they need from conventional lenders.
“The Flexible Capital Fund is the only impact investment fund based in Vermont that provides revenue based financing (RBF) as an alternative to equity investment,” said Janice St. Onge, President. “Unlike equity capital, our flexible investment structure helps companies in Vermont grow without having to give up ownership or decision making. As we enter our tenth year of financing, and navigate our way through the coronavirus pandemic, we have seen an increasing need for and interest in RBF investment in Vermont and New England. This CDFI award will help us identify new and innovative investment structures, expand our geographic reach and transition to the next generation of the Fund so we can continue to provide companies who are paying living wages, producing healthy food and mitigating climate change, with the right match of capital to grow and stay in the region.”
Established in 1989 and CDFI-certified in 1997, Opportunities Credit Union is an award-winning financial institution that serves businesses and personal bankers alike. Opportunities Credit Union serves the community by being a 7(a) lender through the Small Business Administration, participating in the FHLB of Boston’s Jobs for New England, Housing our Workforce and Equity Builder loan programs and through its Money Sense financial counseling program.
“The CDFI grant award is highly gratifying and assures that our long history of bringing economic justice to Vermont will continue,” said Kate Laud, President and CEO of Opportunities Credit Union. “COVID has been particularly challenging to under-banked Vermonters due to job loss, childcare loss and general economic uncertainty. As a community development credit union, we are mindful that some longer term economic challenges may persist and negatively impact our members. Funding for our counseling and lending programs will enable us to continue to serve as them in the post-COVID timeframe.”
The Vermont Community Loan Fund (VCLF) is a mission-driven, community-focused alternative lender working with entrepreneurs and organizations unserved or underserved by traditional lenders. VCLF financing helps lower-income and lower-wealth Vermonters access safe, affordable homes, quality jobs, quality early care & learning and other essential community services like health care, family services and the arts.
“The CDFI Fund has again recognized the importance of the Loan Fund’s work providing all Vermonters equal access to important financial resources,” said VCLF Executive Director Will Belongia. “This award allows us to continue our mission-driven, rural economic development, and help us support Vermonters’ financial stability and quality of life.”
The Flexible Capital Fund provides creative financing in the form of near equity capital -subordinated debt and revenue based (a.k.a. royalty) financing – to growth-stage companies in the food systems, forestry and clean technology sectors. As a mission-based investor, the Flex Fund is committed to helping portfolio companies grow and to help accelerate the rate at which Vermont, and the region, move towards healthy food systems, clean energy, and climate change solutions.
The federal CDFI Program invests in and builds the capacity of community credit unions, banks, loan funds and other financial institutions serving rural and urban communities across the nation that lack adequate access to affordable financial products and services. Since its creation in 1994, the CDFI Fund has awarded more than $3.6 billion to CDFIs, community development organizations, and financial institutions.
