TREASURER ROB MCCORD ANNOUNCES $10 MILLION IN AFFORDABLE AND INNOVATIVE "MICRO-LENDING" FOR SMALL BUSINESSES
McCord visits micro-loan recipient in Lancaster, encourages community-building financial firms to apply for funding
LANCASTER, Pa. – Pennsylvania Treasurer Rob McCord today joined the owners of a local foods grocery in Lancaster City to kick off the application period for Treasury's new Micro-Lending Investment Initiative.
In Expressly Local Foods, Treasurer McCord witnessed firsthand how access to micro-loan funding can help small businesses grow and create jobs. He toured the woman-owned grocery enterprise that benefitted from the type of micro-loan McCord's office is now making available through Community Development Financial Institutions (CDFIs) across the Commonwealth.
“In Pennsylvania, small businesses account for over 50% of the private sector workforce, and the state's one million small businesses make up over 90% of all businesses in the Commonwealth,” Treasurer Rob McCord said. “Yet poor access to funding often prevents talented entrepreneurs from putting out their „open for business' sign. Small businesses responsibly and durably build their communities and provide great jobs. They are also often good investments.”
"I'm proud our Micro-Lending Initiative will create funding for eligible CDFIs to help local entrepreneurs start or grow their small businesses and create jobs,” McCord added.
Through the Micro-Lending Initiative, Treasury will make available $10 million in loans to CDFIs, which they can then lend to entrepreneurs. Beginning today, CDFIs can apply for a share of this funding via the application found on www.patreasury.gov. The application period will close April 16.
CDFIs, such as Community First of Lancaster – which loaned start-up funds to Expressly Local Foods owners Kharran Cattel and Cheryl Young – have long focused on connecting local entrepreneurs with small-dollar loans. A strong track record, stable financial position, and deep connections to their communities make CDFIs a safe investment for Treasury, and they provide a mechanism through which Treasury can gain additional diversification in its portfolio while helping small businesses grow and create jobs.
“Many small businesses need funding that the owners can‟t – and shouldn‟t – throw on a credit card," said Treasurer McCord. "Yet small loans are too often unattractive to traditional banks. With their strong and proven track record, CDFIs can safely and securely fill this funding gap for entrepreneurs and help our economy recover."
The Department of Community and Economic Development, through the Pennsylvania Economic Development Finance Authority, has partnered with Treasury to make an additional $1 million available
to these lending institutions to supplement Treasury‟s Micro-Lending Initiative. This funding will
accompany each Treasury investment, providing a 10% grant match to support each loan, allowing the
CDFIs to provide additional business plan development and coaching services.
Treasury will be earning a market-based rate of return on invested capital, set by a formula based on
medium-term interest rates and comparable debt spreads from other financial sectors, "so, as a result of our program, Pennsylvania's taxpayers will get good investment returns as well as good businesses andgood jobs,” McCord concluded.
Treasurer McCord encouraged all eligible CDFIs to apply. More information about Treasury's Micro-
Lending Initiative, including the application for funding, can be found at www.patreasury.gov.
Pennsylvania Treasurer Rob McCord is committed to increasing the economic security and prosperity of all Pennsylvanians. Before winning the statewide elected job of State Treasurer, McCord was a successful and respected business leader. He is now focused on strengthening the state’s economy, managing investments to get strong returns for taxpayers, and helping to create good jobs and retirement security for Pennsylvanians. To learn more about Treasurer McCord's initiatives, please visit the Pennsylvania Treasury at www.patreasury.gov. ###
