Limited community development financial institutions are among those eligible to work with a new Citigroup $200 million fund to help small businesses in low and moderate income communities.
The Communities at Work Fund will provide financing to nonprofit and for profit CDFI loan funds that will then lend to small businesses, the bank said today. The loan amount ranges from $200,000 to $20 million at a rate of 4.30% and a term of up to five years. The loans will be interest-only with a balloon payment of principal at maturity. The fund will primarily provide unsecured loans to borrowers.
According to the website communitiesatworkfund.com, community development credit unions, community development banks, and community development venture capital funds are not eligible to use the Citigroup fund.
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The bank said it will provide $199 million through a combination of equity and loans with the Calvert Foundation. The Opportunity Finance Network will contribute the $1 million balance.
CDFI loan funds provided $1.4 billion in financing in 2008 and have loaned $15.9 billion cumulatively supporting more than 48,500 small businesses, according to Citigroup.
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