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Bringing Product & Service Solutions to CDFI Credit Unions for Business Lending

Bringing Product & Service Solutions to CDFI Credit Unions for Business Lending . New York State CDFI Coalition Conference – Credit Union Lunch September 30, 2013. The Problem: Main Street Business Owners* Don’t Get What they Need to Succeed.

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Bringing Product & Service Solutions to CDFI Credit Unions for Business Lending

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  1. Bringing Product & Service Solutions to CDFI Credit Unions for Business Lending New York State CDFI Coalition Conference – Credit Union Lunch September 30, 2013

  2. The Problem: Main Street Business Owners* Don’t Get What they Need to Succeed 8,000 small and micro business owner credit applications declined each business day** Alternative lenders Nonprofit community lenders ? • Banks: Small loans too costly to underwrite profitably • Alternative lenders: Fast and efficient but very expensive • Community lenders: Hard for business owners to find, limited service lines and capacity constrained • Business owners: Frustrated • Community and economy: Missed opportunities *Solo, micro and small business owners **Treasury Secretary Jacob Lew, 10 June 2013

  3. The Solution: A New Technology-Enabled Infrastructure for Main Street REPRESENTATIVE, NOT EXHAUSTIVE Product, Service & Content Partners Capital Partners Marketing Partners Distribution Partners Need to define compliant solution for CDFI credit unions

  4. Our Vision: Every Business Owner Gets Insight & Access Through CDFIs • Understanding of business performance, and path to “right fit” capital • Access to real people on the phone or in person • Access to capital and/or services as quickly as one day

  5. TILT Forward Short-Term Working Capital Loan Complements and Extends a CDFI’s Product Portfolio Value proposition for Credit Unions?: • Better serve current clients • No up-front investment (e.g. per loan fee) • Easy to integrate into current operations $500 $5K $50K $150K “Credit Builder” loans • Secured • 1 year term “Micro-Loans” • Up to $50,000 • Secured • Interest rates from 7.75% - 12% • Up to 72 months term • Short-term working capital loans $5,000 - $150,000 • Unsecured • Interest rate up to 16.5% + origination fee • Automated daily repayments • 6 to 18 months term

  6. AEO and the Federation are Collaborating to Create a Compliant Solution for Credit Unions • Initiatives • Micro Capital Task Force • Industry Strategic Plan • Building Capacity in the Southeast • Strengthening Statewide Networks • Re-Imagining Technical Assistance • Core Functions • Communications • Policy & Advocacy • Knowledge Sharing & Community Credit union working group in formation. Contact Melanie Stern or Tammy Halevy • National Campaign • Multi-Stakeholder Alliance • Product, Service and Capital Solutions for CDFIs

  7. Questions? Let’s Talk! Tammy Halevy SVP, New Initiatives AEO thalevy@aeoworks.org (202) 650-5580 ext 52

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