A lender the Treasury's CDFI Fund has certified as having a primary mission of community development and serving a defined target market.
A CDFI is an entity that meets the Treasury Department’s certification rule. The CDFI Fund certifies an entity that passes six tests: its primary mission is promoting community development; it is a financing entity; it serves a target market, meaning an investment area or a targeted population; it provides development services along with its financing; it stays accountable to that target market through its governing or advisory board; and it is not a government agency. Banks, credit unions and other financing organizations can all hold the certification.
Two things follow for a borrower. A CDFI is built to lend in places and to people that other lenders reach less, so a request a bank declined, such as a small loan to a young business in a lower-income area, may fit its mission. And for credit unions the status adds lending room: one that participates in the CDFI program is exempt from the aggregate cap on member business loans.
Certification describes mission and market. By the rule’s own terms it is not an opinion on a lender’s financial viability.
How it shows up in the data here
CDFI certification is not a field on this site. The files used here, from the FDIC, NCUA, HMDA and SBA, do not flag it, and CDFI loan funds that are not banks or credit unions appear only where they show up in SBA or HMDA records. You can still find mission lenders by what they do: start with credit union business lenders and check certification with the lender.
Go further
- Credit union business lenders: Credit unions that made commercial loans, by state.
- Search lenders: All lender types.
- What to do after a bank says no to a business loan: One bank's no is one lender's answer, and the reasons are yours to ask for. They usually point to a constraint you can name.
- How to place a business loan with a credit union: Credit unions make business loans, and some make a lot of them. Three things are different from a bank: the borrower must be a member, most credit unions work under a cap on business loans, and the limit to one borrower is set against net worth.
Related terms
- Low-income designation: An NCUA status for a federal credit union when a majority of its members are low-income by the rule's test. It lifts the cap on member business loans.
- Member business loan cap: The legal ceiling on a credit union's member business loans: 1.75 times its net worth, or 1.75 times the net worth a well capitalized credit union must hold, if that is less.
- Credit union: A member-owned cooperative lender. It lends to the people and businesses inside its field of membership and files a call report with NCUA every quarter.
- Non-bank lender: A non-bank lender is a company that makes loans but does not take deposits, so it is not a bank, a savings institution or a credit union.
- Community development loan: Under the Community Reinvestment Act rules, a loan whose primary purpose is community development, such as affordable housing or financing for small businesses and farms.
- Community Reinvestment Act (CRA): The 1977 federal law that directs bank regulators to assess how well each bank helps meet the credit needs of its local communities, including low- and moderate-income neighborhoods.
Sources
Plain definitions for orientation, not legal, tax or credit advice. A lender's own policy decides what it will do.