Community Development Institutions Offer Small-Firm Funding
While discussions about the nation's economic growth are often focused on big business, small businesses keep the nation diversified, act as an innovation engine and employ just over half of the private sector workforce.
From 1993 to 2003, firms with fewer than 20 employees accounted for almost 80 percent of net new jobs in the United States.
One source of financing for many small firms comes from Community Development Financial Institutions, or CDFIs, which exist to help boost low-wealth or distressed communities. At the end of 2006, CDFIs had given $105 million to firms with five or fewer employees with a maximum loan investment of $35,000. They gave nearly $4.2 billion in 2006 to firms with more than five employees in loan amounts greater than $35,000. The average CDFI loan size for micro firms was about $11,000 and for small businesses it was $93,000.
Read more about this news written by Sharon McLoone at The Washington Post.