Bank of America today committed $20 million in new funding for 13 Community Development Financial Institutions (CDFIs) to provide financing for small businesses and residents affected by Hurricane Sandy. CDFIs are private sector financial institutions that finance affordable housing, small businesses, community facilities, and economic revitalization programs.
The investment will fund CDFIs that provide low-cost loans to small businesses and homeowners, as part of rebuilding efforts in hardest hit areas. To make the loans affordable, Bank of America will provide the capital to CDFI participants at a zero percent interest rate, as well as defer principal repayments.
“There was a ripple effect. When we were displaced from our office and unable to use the transportation system to contact businesses, we had a hard time addressing the financial needs of our customers,” said Paul Quintero, CEO, Accion East and Online. “Today, we are back and fully focused on the rebuilding effort ahead. Because of Bank of America’s proactive outreach, we were able to secure the capital to help businesses get the financial support they need.”
The storm’s timing is particularly challenging for small businesses trying to serve customers during the holiday rush. For example, a Chinese restaurant located in Manhattan was impacted by the storm, resulting in thousands of dollars in damages and loss of sales. The business owners will use CDFI funding for repairs and to restock inventory, enabling them to reopen during a busy time of year.
“As the nation’s leading CDFI investor, we know these organizations can help provide much needed capital to small businesses, nonprofits and consumers quickly to help them recover. We believe that expanding our funding offers an efficient solution for extending financial support during this challenging time,” said Dan Letendre, CDFI executive for Bank of America.
“Thousands of individuals, families and business owners were affected by the storm, which caused widespread damage and shuttered storefronts,” said Wayne Meyer, president, New Jersey Community Capital. “The rebuilding has only just begun here in New Jersey, and capital from Bank of America is an important part of our ability to help small business owners and communities impacted by the storm.”