Community Development Financial Institutions (CDFIs) are mission-driven lenders that provide financing to businesses and individuals in underserved communities. In Texas, CDFIs fill a critical gap between traditional bank lending and the capital needs of small businesses that may not qualify for conventional loans due to limited credit history, insufficient collateral, or early business stage.
What CDFIs Do
CDFIs are certified by the U.S. Department of the Treasury and include community development banks, credit unions, loan funds, and venture capital funds. They provide:
- Small business loans (from microloans to larger term loans)
- Business lines of credit
- Equipment financing
- Commercial real estate loans
- Technical assistance and business consulting
Major Texas CDFIs
LiftFund
Based in San Antonio, LiftFund is one of the largest CDFIs in the country. It provides microloans and small business loans across Texas, with particular focus on underserved entrepreneurs. LiftFund also provides business consulting and training.
PeopleFund
Based in Austin, PeopleFund provides microloans, small business loans, and SBA-guaranteed loans to Texas businesses. PeopleFund is an SBA-approved microlender and community advantage lender.
BCL of Texas
BCL of Texas provides small business lending and community development financing. It offers SBA-guaranteed loans and works with businesses across the state.
Other Texas CDFIs
Additional CDFIs serving Texas include TruFund Financial Services, Opportunity Finance Network members, and community-based credit unions with CDFI certification.
Who Qualifies for CDFI Loans
CDFIs are designed to serve borrowers who face barriers to traditional financing. Common CDFI borrowers include:
- Startups without established business credit
- Businesses with limited collateral
- Business owners with imperfect personal credit
- Businesses in low-income or underserved communities
- Minority-owned, women-owned, and veteran-owned businesses
- Small businesses that need smaller loan amounts than banks typically offer
How to Apply for a CDFI Loan
- Research CDFIs in your area: Use the CDFI Fund's online locator or contact your local SBDC or SCORE chapter for referrals.
- Prepare your application: Gather your business plan, financial statements, tax returns, and a clear description of how you will use the loan proceeds.
- Meet with a loan officer: CDFIs typically provide more personalized service than traditional banks. Many offer pre-application consultations.
- Complete the application: Submit the required documentation and respond promptly to any follow-up requests.
- Receive decision: CDFIs often process applications faster than traditional banks, especially for smaller loan amounts.
CDFI Loan Terms
CDFI loan terms vary but are generally more flexible than bank loans. Interest rates may be higher than bank rates but lower than alternative lenders. Loan amounts range from a few thousand dollars for microloans to several hundred thousand dollars for larger term loans. CDFIs often provide longer repayment terms and lower down payment requirements.
Find Programs That May Fit Your Business
CDFI lending is one part of the Texas business support ecosystem. Your business may also qualify for SBA-guaranteed loans, grants, tax credits, and workforce training programs.
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