By bundling and selling CDFI microloans to banks, Scale Link hopes to increase capacity for other CDFIs across the country.

Bank financing for entrepreneurs is harder to get these days, thanks to rising interest rates and the collapse of Silicon Valley Bank. That’s especially problematic for entrepreneurs of color, who typically have a harder time getting financing than their white peers.

Brett Simmons has spent the past three years coaxing banks and community development financial institutions to embrace his vision of creating a nationwide secondary market for microloans.

Funding will advance an emerging secondary market for community-based microlending for small businesses, filling a vital role in creating opportunity and equity in low-income communities.

Heeding the call for greater race and gender equity, policymakers, donors, and investors want to uplift small businesses in underserved communities. But boosting access to capital for business owners of color is easier said than done.

The CRA Podcast was created to elevate Community Reinvestment Act (CRA) concepts and inspire industry leaders to consider new approaches to their economic and community development reinvestment pursuit.

ImpactAlpha, Dec. 16 – The nonprofit Entrepreneur backed Assets Fund will buy loans originated by a half-dozen members of a collaborative of community development financial institutions, or CDFIs, to enable them to make more loans. The fund will sell the loans to banks to satisfy their Community Reinvestment Act requirements.

Nagging reminders that the mainstream financial system isn’t designed to work for everyone show up in so many visible ways. Vacant houses or empty storefronts, occasionally a flash of color and the glow of neon lighting from a payday lender.

Based on the West Side of Chicago, Accion Serving Illinois and Indiana is a revolving loan fund for small businesses. It primarily makes microloans — defined as small business loans of $50,000 or less — to borrowers who otherwise may only have access to predatory lenders.