Lend an ear to this exciting news: Adelante Fund, MEDA’s community loan arm, just became a certified Community Development Financial Institution (CDFI). With only about 1,000 CDFI’s across the land, and just 11 others based in San Francisco, this is especially big news. Additionally, MEDA is the only San Francisco CDFI focusing primarily on providing capital to Latinos.
What is a CDFI?
CDFIs are certified by the U.S. Department of the Treasury’s Community Development Financial Institutions Fund and represent a government seal of approval that the financial institution effectively serves a low-income, targeted audience. Adelante Fund became a certified CDFI by being on the cutting edge of fostering community development in the Mission District by tailoring our financial products and business coaching to our Latino and immigrant communities.
CDFI’s invest in local communities, providing critically needed access to capital often unavailable from traditional lenders. In MEDA’s case, Adelante Fund was launched to respond to the urgent need for neighborhood lending and investment focused on stabilizing Latino and immigrant businesses, workers and tenants in the Mission. While Adelante Fund’s work has begun with business lending, the long-term goal is comprehensive community development and neighborhood stabilization.
“Adelante Fund being certified as a CDFI is a major step forward for the Mission. We kept seeing the need for an institution focused squarely on financial products and investments for the Mission’s Latino and immigrant communities. Adelante Fund is now positioned to attract far greater capital to fulfill that need,” explains Associate Director of Asset Building Programs Nathanial Owen.
Adelante Fund lending to date
Adelante Fund has already made strides in meeting the community’s need for small-business financing as one way to keep the Mission a working-class, Latino neighborhood. Since Adelante Fund’s launch in October 2015, there has been over $1.146 million lent via 40 loans, with 85 percent of loans to Latinos, 89 percent to immigrants looking to start or expand their small businesses and 85 percent to women entrepreneurs. Loans range from $5,000 to $100,000 and are at low-interest rates. These are loans to immigrants like Sofia, who needed $5,000 to buy a van for her monthly trek to garner merchandise in Los Angeles. Or Saul from Mexico, the owner of El Gran Taco Loco, who received $70,000 to rise from the ashes and refurbish a new space after a devastating fire.
Adelante Fund showcases proof positive that lending to immigrants is an effective business model that should be replicated nationally. There has been a zero percent default rate on loans, partly attributed to MEDA’s ongoing, free business coaching and technical assistance provided to every loan recipient. In turn, small businesses have created jobs for the community. For example, Alicia’s Tamales los Mayas, started by Alicia in her kitchen a few years back, harnessed the power of a $100,000 Adelante Fund loan to open space in a factory, with 15 employees now making 40,000 tamales a month.
Emergence of a neighborhood-focused CDFI in the Mission
Becoming a certified CDFI will increase sustainability, fund capitalization and lending capacity of Adelante Fund. As a certified CDFI, Adelante Fund is poised to move beyond just small-business lending and work aggressively to procure an increased capitalization of $50 million by 2020. Such funding is needed to support the innovative work of the MEDA Community Real Estate team as they preserve and produce affordable housing in the Mission — a neighborhood facing one of the worst housing crises in the nation. That 12-person team has already secured about 1,000 units of affordable housing, and is now working on a minimum of another 1,000 units over the next four years.
Strategies are also being developed to determine the ideal financial products and investments to strengthen community institutions and consumers, as part of MEDA’s multi-faceted approach to rebuilding the Mission.
“In the months ahead, MEDA will work collaboratively with community partners to comprehensively define the products and investments around small business, housing, workforce and consumer finance that Adelante Fund will be committing itself to for our neighborhood through 2020,” states Executive Director Luis Granados.
You can bank on Adelante Fund.