If a big bank turned down your business loan, or you are not sure you are ready for one, a CDFI may be worth a look. Community Development Financial Institutions are mission-driven lenders that work with small businesses and communities that traditional banks often underserve. Many Atlanta entrepreneurs have never heard of them.
Here is what a CDFI is, how CDFI loans differ from bank loans, how to find one that serves metro Atlanta and how to prepare before you apply.
Flex Fuel does not promise funding or approvals. Every lender sets its own requirements and makes its own decisions. This article is general education, not financial, tax or legal advice.
What is a CDFI?
A CDFI is a financial institution certified by the U.S. Department of the Treasury's CDFI Fund. According to the CDFI Fund, CDFIs include credit unions, banks, loan funds and venture capital funds that operate with a primary mission of serving low-income communities.
To earn CDFI certification, an organization must, among other requirements, have a primary mission of promoting community development, be a financing entity, primarily serve one or more target markets and provide development services along with its financing. That last point matters for business owners: many CDFIs pair loans with coaching, training or technical assistance.
What the CDFI Fund does not do
The CDFI Fund itself does not make loans to individuals or businesses. It provides support to certified CDFIs, which then lend in their communities. If a website claims to offer "CDFI Fund loans" directly, be cautious.
Types of CDFIs that lend to small businesses
Community development loan funds
Often nonprofits, these lenders may focus on small business loans, microloans and startup financing. Some also offer one-on-one business advising.
Community development credit unions
These are member-owned credit unions with a community development mission. Some offer business accounts, business loans and credit-building products for owners.
Community development banks
These are regulated banks with a mission to serve underserved communities. They can offer business checking, term loans and lines of credit.
Community development venture capital funds
These invest in businesses in exchange for equity. They are less common and usually fit high-growth companies rather than most local service businesses.
How CDFI loans can differ from bank loans
Every CDFI is different, but business owners often notice a few things:
- A broader look at the borrower. Many CDFIs say they consider the full story behind your application, not just a score.
- Smaller loan sizes. Some CDFIs focus on loans that are too small for a big bank to prioritize.
- Support beyond the loan. Because certification requires development services, many CDFIs offer coaching, workshops or help with financial statements.
- Mission requirements. Some CDFIs serve specific neighborhoods, industries or groups of owners, so you need to fit their target market.
A CDFI is still a lender. It will look at your ability to repay, and it may ask for collateral or a personal guarantee. Our guide on personal guarantees for business loans explains what that commitment means.
How to find a CDFI that serves Atlanta
You do not need to rely on ads. Use these official and established tools:
- CDFI Fund's list of certified CDFIs. The CDFI Fund's general public FAQ links to its list of certified CDFIs, which you can sort by location and type.
- Federal Reserve Bank of Minneapolis CDFI Finder. The CDFI Finder lets you search by ZIP code and radius.
- Your local credit union. Ask whether it is a certified CDFI or can refer you to one.
When you find a few options, check whether each one serves your county (Fulton, DeKalb, Clayton, Cobb, Gwinnett or elsewhere), your industry and your loan size.
How to prepare before you apply
CDFIs may be flexible, but a prepared application still makes a difference. Start here.
Know exactly what the money is for
Write down the amount, what it will buy (equipment, inventory, a build-out, working capital) and how it helps the business earn more. Lenders want to see that the loan has a clear purpose and a path to repayment.
Get your paperwork in order
Most business lenders ask for some combination of:
- Business formation documents and your EIN
- Recent business bank statements
- Tax returns, business and personal
- A profit and loss statement and balance sheet
- A short business plan or summary
- A debt schedule listing what the business already owes
Our guides on what lenders look for in business bank statements and writing a business plan for a loan can help you build this package.
Review your personal credit
Many small business lenders review the owner's personal credit, especially for newer businesses. Look for errors, late payments and high balances before you apply so you are not surprised. Flex Fuel clients use SmartCredit to see their reports and scores in one place. If you find information that is inaccurate, our guide on how to dispute credit report errors walks you through it.
Thinking about applying for a CDFI business loan? Book a time to talk through your CDFI loan prep with us.
Check your business credit, too
If your business has trade accounts or credit cards, review your business credit files as well. Our guide on checking your business credit report explains how.
Ask about technical assistance
If you are not ready yet, ask the CDFI whether it offers coaching or classes. Starting with its business support can help you understand what it looks for before you formally apply.
CDFI loan vs. SBA microloan vs. bank loan
These options can overlap. Some CDFIs also take part in SBA programs, and some banks partner with CDFIs. A quick way to think about it:
- Bank loan: often best for established businesses with strong credit, steady revenue and collateral.
- SBA microloan: a specific SBA program delivered through nonprofit intermediary lenders. See our guide to SBA microloans in Atlanta.
- CDFI loan: a mission-driven lender's own product, which may come with business support and a broader review.
If you were already turned down somewhere else, read what to do after a business loan denial before applying again.
How Flex Fuel helps
Flex Fuel helps Atlanta business owners get funding-ready: reviewing personal and business credit, organizing documents and building a plan before they talk to lenders. Explore our services and see how our guarantee works.
Getting ready to talk to a CDFI or other lender? Book a complimentary strategy session. We will review where your credit and paperwork stand and map out your next steps.
Book a Consultation ›Frequently asked questions
What does CDFI stand for?
Community Development Financial Institution. CDFIs are certified by the U.S. Treasury's CDFI Fund and include credit unions, banks, loan funds and venture capital funds with a community development mission.
Can I get a loan directly from the CDFI Fund?
No. The CDFI Fund does not make loans directly to individuals or businesses. It supports certified CDFIs, which lend in their communities.
Do CDFIs lend to startups?
Some do, especially loan funds that focus on microloans and new businesses. Each CDFI sets its own requirements, so ask about time-in-business and revenue rules before applying.
Is my personal credit checked for a CDFI loan?
Often, yes, especially for newer businesses. Review your personal credit reports with SmartCredit before you apply so you know what a lender will see.
