When I was on the board of the Community Loan Fund of the Capital Region, I remember being struck to learn that along with small business loans and affordable housing development and nonprofit facility financing, we often made cash flow loans to nonprofits. Many organizations providing all sorts of crucial services would get government contracts, but wouldn’t get paid in time to, oh say, make payroll or pay rent. The loan fund covered the gap. It wasn’t as exciting to report out at the end of the year as number of jobs created or housing units developed, but it sure was important.
So it’s no surprise to me to learn that CDFIs across the country were trying to do what they could to ease the effects of the recent government shutdown. From the Opportunity Finance Network, here’s a partial list of the kinds of things they were doing:
- DC Credit Union offered furloughed federal employees interest free loans.
- NeighborWorks Capital offered short-term bridge loans to NeighborWorks network members who are experiencing delays in funding or reimbursements from federal contracts or grants for affordable housing programs.
- Fahe provided a “Federal Shutdown Stabilization Loan” for its members unable to access federal sources of credit.
- Renaissance Community Loan Fund helped their mortgage clients experiencing hardship due to the government shutdown.
- Accion USA provided bridge loans to clients that were in the pipeline for an SBA loan.
- Multipli Credit Union (formerly CU Community Credit Union) partnered with the Community Foundation of the Ozarks and to provide interest-free loans to furloughed government workers.
- PeopleFund offered emergency short-term loans to nonprofits and social agencies impacted by Federal Shutdown.
These kinds of things show how important CDFIs are—and how important it is that we allow our community lenders flexibility to respond to time-sensitive needs.
But of course this was by no means enough to make up for the harm and fear caused by the shutdown, both for individuals and organizations. CDFIs can help with interim measures in a crisis, but there’s no substitute for a capable, reliable government to carry out the work of running the country and maintaining a fair, safe, and compassionate society.