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
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
2
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
3
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
TILT Forward Short-Term Working Capital Loan Complements and
Extends a CDFI’s Product Portfolio
Value proposition for Credit Unions?:
1.
2.
3.
$500
$5K
$50K
Better serve current clients
No up-front investment (e.g. per loan fee)
Easy to integrate into current operations
$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
5
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
National Campaign
Multi-Stakeholder Alliance
•
6
Credit union working
group in formation.
Contact Melanie
Stern or Tammy
Halevy
Product, Service and
Capital Solutions for CDFIs
Questions? Let’s Talk!
Tammy Halevy
SVP, New Initiatives
AEO
thalevy@aeoworks.org
(202) 650-5580 ext 52
8