Community Development Financial Institutions (CDFI) Fund has pumped in $600,000 to support a fund aiming to help low-and middle-income people initiate their own small business. This money is going to serve as reserves so as to help cover losses whenever borrowers make mistakes or fail in making repayments.
Kathy Ricci, CEO of ‘Utah Microenterprise Loan Fund’ says that 12 percent of recipients of loans from the agency are found to default. But now with this cash reserve it is possible for banks and credit unions to be in a more comfortable position to loan the microenterprise fund money to starters and small business organizations.
Ricci stated that there is $5 million in assets reserved for the Salt Lake City-based Microenterprise fund. Since 1993, this body has granted loans of $9.5 million to 700 recipients. The lending can extend up to $25,000, but then in general the average amount is found to be $13,000.
The CDFI fund would allow small businesses increase size of loans from $35,000 to $50,000. Since $600,000 is kept in reserve for the CDFI fund, it will be of aid for businesses to expand to other areas of Utah. Presently, ‘Utah Microenterprise Loan Fund’ is known to operate in 11 counties from Utah North.
This article was submitted by Raj Tulshan, Director of Business Development of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to