Keeping the Financial Pipeline Flowing
Cooperative Fund Serves Expanding Role in New England Financial Sector
For 37 years, CFNE has been connecting social investors with cooperative enterprises, operating as a US Treasury certified Community Development Financial Institution (CDFI) that serves the New England region. CFNE’s borrowers, like other consumers, have weathered poor economic times. However, out of the $26 million in loans made by the cooperative since it opened its doors, the loan repayment rate exceeds 99 percent, better than that of most peer lenders in the CDFI world and in conventional lending. Demand for CFNE’s services has been great, particularly as banks stopped lending to start-ups, cooperatives and businesses.
CFNE obtained funding from US Treasury’s CDFI Fund and its Healthy Food Financing Initiative fund. CFNE is also a USDA business and industry guarantee program facilitator, allowing it to provide financial backing to enable borrowers to obtain financing from local banks. Currently, more than half of CFNE’s outstanding loans are with food co-ops and co-op housing; the balance of its loans are with co-op businesses, manufacturing housing co-ops worker co-ops, and other entities.
CFNE was recently identified as one of 20 recipients nationally of the Small Business Administration’s pilot Intermediary Lending Program (ILP) — the first time SBA funding has been used to assist cooperatives. Worker and producer cooperatives are eligible for funding through the ILP program. To date, CFNE has lent $480,000 out of the $1 million to 10 borrowers, with $30,000 already repaid and ready to be reloaned. CFNE hopes that additional future ILP funding will become available and advocates for making this program available to consumer cooperatives as well as worker and producer cooperatives.