written by Jessie Lee, the managing director of Renaissance Economic Development Corporation (REDC)
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The CDFI Fund is under threat, and with it, the dreams of countless entrepreneurs.

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In the late 1990s, Renaissance started the New York State Entrepreneurial Assistance Training Program, aimed at teaching low-income individuals the skills to become business owners. We established our training center at the intersection of the Lower East Side and Chinatown in Manhattan—an area predominantly populated by newly arrived Chinese immigrants, Eastern European Jews, and Puerto Ricans. At the time, this community was also known for having high gang violence and was not a place anyone would want to walk through late at night. Yet, when we offered our entrepreneurial training, people eagerly attended, even on weekends and late into the evenings, driven by the hope of overcoming poverty. Despite barely earning minimum wage and living just above the poverty line, these individuals believed that with hard work and dedication, they could eventually save enough money to start their own businesses and achieve the American Dream.

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However, once these trainees were ready to start their businesses, they quickly realized that the money they had saved wasn’t enough to cover startup costs in an expensive city like New York. Renaissance attempted to help these entrepreneurs apply for bank loans, but without collateral, significant savings, or credit history, the banks turned them down. Still, we believed in these entrepreneurs. We saw their determination and the thoughtful business plans they developed. We knew they could succeed if given the opportunity.

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That’s when Renaissance made a crucial decision: we would raise our own funds to lend to these entrepreneurs. One of our very first loans went to Magnolia Bakery, a small bakery in Lower Manhattan founded by two passionate women who had a dream of starting their own cupcake business. Today, Magnolia Bakery operates 39 locations across 8 countries.

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Fundraising for lending capital proved to be challenging, and demand for loans far exceeded our available funds. This led us to apply to become a CDFI loan fund. Renaissance was one of the first certified Community Development Financial Institutions (CDFIs) when the Riegle Community Development and Regulatory Improvement Act of 1994 was enacted. Being a certified CDFI allowed us to apply annually for grant funding, which helped us greatly increase our lending capacity. These grants could be used for loan capital or loan loss reserves, which are needed in the event of loan defaults. This model has proven effective, as we can leverage a $500,000 CDFI grant to raise an additional $2.5 million from other private or public funders, resulting in a total loan fund of $3 million. With average microloans of $30,000, we helped launch 100 small businesses, each creating at least two full-time jobs, for a total of 200 new jobs in our low income community.

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This $500,000 grant represented an extraordinary investment in the community, costing the federal government less than $3,000 per job in a low-income neighborhood. Even more remarkable, these loans have a 95% repayment rate, meaning that of the $3 million Renaissance lent out, $2.85 million was repaid and reinvested into 100 new small businesses, creating an additional 200 jobs. Over the past 25 years, Renaissance has deployed nearly $70 million in loans to 2,800 small businesses, resulting in more than 7,000 jobs in our communities.

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Today, when you visit Chinatown/Lower East Side, you can see the vibrant energy of thriving small businesses. Trucks unload goods early in the morning, and customers walk through the streets, spending their hard-earned money at these local mom and pop shops. This is the true spirit of community development—individuals working hard, together, to build their own futures. Renaissance’s services have since expanded and we now provide capital throughout all five boroughs of New York City, Long Island, the mid-Hudson Valley of New York, and New Jersey. 

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Over the last 30 years, the CDFI Fund’s creation has resulted in success stories like Renaissance’s all over the country in both urban and rural communities. Yet, this past Friday, President Trump signed an executive order to eliminate the CDFI Fund. What is a powerful catalyst for economic prosperity is now at risk of being extinguished along with the hopes and dreams of entrepreneurs across the country. The CDFI Fund was never intended as a "charity" or a “handout”; rather, it applies the principles of capitalism to lend with dignity to those in need. Borrowers do need to repay these funds.  However, it provides an opportunity for low-income individuals to build their own livelihoods, escape poverty, and ultimately, build safer and stronger communities. This is the essence of the American Dream that we all strive for.

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The CDFI Fund represents an investment – a belief – in our economic future. It leverages both public and private funds to eradicate poverty. Ending the CDFI Fund is not a partisan issue—it's a matter that affects us all. If the CDFI Fund is eliminated, it will be an economic tragedy that will be felt most acutely in the communities that have long been overlooked and neglected.

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I urge Congress to save the CDFI Fund. The Fund has helped us provide much-needed capital to under-resourced communities for nearly 30 years, and it is critical that we continue this work. The CDFI industry currently manages $450 billion in assets, and this capital has been deployed to help low-income communities thrive. Without the CDFI Fund, our communities will suffer, and the progress we’ve made over the last few decades will be lost.

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We need your voice. Join us in urging Congress to #SaveCDFI. Share this message, let your representatives know, and help protect this vital resource. Together, we can ensure no community is left behind.

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國會必須拯救 CDFI 基金

1990 年代末，亞洲人平等會振興商業服務中心創辦了紐約州企業家培訓計畫，旨在教授低收入人士創業所需技能。培訓中心設在曼哈頓下東城與華埠交界，這裡主要由華人、猶太人和波多黎各人組成。社區因幫派猖獗而臭名昭著，然當我們提供創業培訓時人們熱情參與，因為他們希望能夠擺脫貧困。

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當這些學員準備創業時卻發現儲蓄的資金無法負擔昂貴的創業成本。振興商業服務中心幫助這些企業家申請銀行貸款，但缺乏抵押品、存款或信用記錄被銀行拒絕。於是中心做出了一個關鍵決定：我們籌集資金來貸款給創業者，首批得到貸款的Magnolia Bakery由兩位充滿熱情的女性創立的麵包店，如今已在 8 個國家的 39 個地點營運。當 1994 年《Riegle 社區發展與監管改進法案》通過時，振興商業服務中心成為首批獲得認證的社區發展金融機構之一。獲得 CDFI 認證後，我們每年都可以申請補助資金，這大大提高了我們的放貸能力。

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這種模式成效顯著。例如我們可以利用 50 萬美元的 CDFI 補助金來籌集額外的 250 萬私營或公共資金，這總額 300 萬美元的貸款基金以平均 3 萬美元的小額貸款計算，足以幫助 100 家小型企業起步，每家企業至少創造 2 個全職機會，等於 200 個新工作崗位。這筆 50 萬美元的補助金是對社區的投資，聯邦政府每創造一個工作崗位，成本僅為 3,000 美元。此外這些貸款的還款率高達 95%，也就是說在振興商業服務中心放貸的 300 萬美元中，有285 萬美元得以回收並再投資於100 家新企業，進一步創造 200 個新的工作機會。過去 25 年間振興商業服務中心已發放近 7,000 萬美元貸款，幫助 2,800 家小型企業發展，創造了超過 7,000 個就業機會。

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上週特朗普總統簽署了一項行政命令威脅取消 CDFI 基金。這將損害無數創業者的希望與夢想。CDFI 基金從來不是「慈善」或「施捨」，而是一種體現資本主義原則的貸款模式，給有需要的人提供尊嚴貸款。借款人必須償還貸款，但這也為低收入人士提供了機會，讓他們得以擺脫貧困，這正是我們所追求美國夢的核心價值。

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CDFI 基金代表著一種投資信念與對經濟未來的信心。它能夠將公共與私人資金相結合來消除貧困。取消 CDFI 基金並不是一個黨派問題，而是關乎我們所有人的共同利益。如果基金被撤銷，那將是一場經濟災難，最終受害最深的將是那些長期被忽視和遺忘的社區。

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我懇請國會拯救 CDFI 基金。該基金已經幫助我們向資源不足的社區提供了長達 30 年的關鍵資金支持。目前，CDFI 行業管理著 4,500 億美元的資產，這些資金已被用來幫助低收入社區蓬勃發展。如果沒有強而有力的 CDFI 基金，社區將遭受重創。

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我們需要你的聲音。讓你的國會代表知道這件事保護這個重要的資源。

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(振興商業服務中心執行總監李芝薇）

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