On October 7, 2024, the U.S. Department of the Treasury organized an event in Washington to explore how the State Small Business Credit Initiative (SSBCI) can support community development financial institutions (CDFIs). The gathering included state government representatives, nonprofit groups, and other stakeholders.
The discussions centered on public-private partnership models for deploying SSBCI funding through CDFIs. Participants also exchanged ideas on facilitating CDFI participation in the SSBCI program and expanding microlending to underserved small business owners.
Treasury officials highlighted the critical role of CDFI lenders in providing responsible and affordable financial alternatives to underserved communities and entrepreneurs. These institutions face their own balance sheet constraints while countering predatory market products.
Panelists at the event reflected on how pandemic-era recovery funding opened opportunities for innovation in community finance and small business lending. They emphasized supporting small-dollar lending for businesses owned by people of color and discussed leveraging these models with federal opportunities beyond SSBCI.
In September 2024, a Treasury report indicated a surge in entrepreneurship and small business growth, with new business applications averaging 430,000 per month in 2024—50% more than in 2019. Despite this growth, many small business owners still struggle to access necessary financing. Evidence points to CDFIs as key supporters during the pandemic, yet they face limited capital sources.
The Treasury Department plans to continue working with stakeholders to improve capital access for underserved business owners while supporting mission-driven lenders.
