Success Story: Community Reinvestment Fund, USA

Introduction – Calvert Impact’s history with Community Reinvestment Fund, USA

Community Reinvestment Fund, USA (CRF) is a community development financial institution (CDFI) based in Minneapolis, MN. Founded in 1988, CRF’s mission is to improve lives and strengthen communities through innovative financial solutions. Calvert Impact Capital made its first loan to CRF in 1997 and continued the lending relationship for nearly three decades. Although CRF graduated from our Community Investment Note® portfolio in 2023, they continue to be a critical partner in our Access Small Business (Access) Program, which brings together state governments, private lenders, as well as CDFIs to scale affordable lending.

Our relationship with CRF exemplifies the ways in which our work at Calvert Impact has evolved over the years, particularly how relationships incubated in the Community Investment Note® portfolio have grown and expanded, seeding new programs and partnerships.

How did our loan have an impact on CRF?

Calvert Impact Capital’s first loan to CRF was $200,000 in 1997. Over our nearly 30-year relationship, the ways in which we financed and partnered with CRF continued to develop as their work and capital needs evolved. Our direct lending relationship over the decades grew to $10 million, supporting the expansion of their small business lending programs across the US, as they were a key partner in our place-based initiatives including Ours to Own Twin Cities and Denver. They also led the industry's first securitized asset pools in the early 2000s, which we helped to finance.

CRF was a key partner in the implementation of a series of Small Business Recovery Funds that we launched in 2020. The Recovery Funds provided crucial financing to small businesses and nonprofits across 19 states in the US during the COVID-19 pandemic. Throughout the pandemic, CDFIs were a financial lifeline for small businesses and nonprofits, especially those owned by under-resourced populations, or that operated in low-income communities.

CRF built and runs CRF Connect (formerly Connect2Capital), an online marketplace that is used to connect small businesses to CDFI lenders. Small business owners seeking loans between $500 and $5 million can submit a single application through CRF Connect to be matched with participating mission-driven lenders in their area who understand and support their business goals. The marketplace can also match small business owners to business advisory services and business resources, helping connect them to guidance on loan application preparation, underwriting processes, final loan document preparation, and loan closing.

Our partnership with CRF and their CRF Connect platform continued into 2023 and 2024, with the development and launch of the Access Program, which builds on the success of the Recovery Funds to deploy capital to small business owners. The Access Program leverages funds from the US Treasury’s State Small Business Credit Initiative (SSBCI) to provide access to capital and technical assistance to historically un- and under-banked small businesses across participating states, as well as access to capital markets for community lenders. Utilizing the CRF Connect platform has enabled both Calvert Impact and CRF to reach more small businesses and further our missions to create an economy that works for all.

How does CRF impact the communities they serve?

All of CRF’s programs are focused on expanding capital access for small businesses, including working capital. “At CRF, every program is designed to support small businesses, including vital working capital. We’re addressing a longstanding need in our communities while staying responsive to the evolving needs of our borrowers,” said Alexis Dishman, Chief Lending Officer at CRF. The organization’s geographic expansion beyond Minneapolis is one example of their responsiveness to their customers. Between 2014 and 2015, CRF shifted towards Small Business Association (SBA) lending in Minnesota and continued to grow into a national lender. SBA lending helps small businesses acquire funding by setting guidelines for loans and reducing lender risk. Specifically, SBA 7(a) loans provide loan guaranties to lenders that allow them to provide financial help for small businesses with special requirements.

In 2022, CRF co-launched the Minnesota Inclusive Growth Fund alongside four other organizations through the Catalyst Coalition Partners. The fund improves access to flexible and affordable capital for small businesses in Minnesota with the purpose of increasing quantity and quality of stage-appropriate support for under-resourced businesses in the state. CRF’s CDFI partners are also crucial, allowing small businesses to receive technical assistance services. “We strive to be a solutions-oriented organization and offer a broader toolkit,” said Dishman.

Last year, CRF piloted their MyPace Capital program which offers flexible loans to small businesses across the country. The program is currently available in Arizona, California, Florida, Michigan, Minnesota, Nevada, New York, and Texas, and provides small business owners with loans for working capital. MyPace Capital participants are paired with a financial business advisor who meets with them to review monthly performance, bank and revenue reconciliation, cash flow analysis, as well as financial projections and forecasting to position business owners for success.

What we can learn from CRF’s success

Over the last three decades, CRF has shown us:

1. Flexible capital and longer-term loans are crucial for small business lenders to serve their clients and expand their geographic reach.
2. Being in tune with the market and having a deep understanding of client needs is critical to responding quickly to market emergencies, as we saw during the pandemic where challenges and economic mobility for small businesses – especially those in under-resourced communities – were intensified.
3. The use of technology, such as CRF Connect, is integral to helping CDFIs scale, allowing them to expand their reach and support new markets and customers.
4. Developing trusted partnerships opens opportunities for deeper impact and broader reach in supporting under-resourced communities and addressing market demand for capital and technical assistance services.

Our relationship with CRF exemplifies how Calvert Impact’s work in US community development has evolved over the last three decades. Our strategic alignment allowed us to first build a strong partnership as lender and borrower, then expand to create the Small Business Recovery Programs, and ultimately partner on the Access program. Their attention to the needs of small business owners aligns with our approach to working with partners who are rooted in community, and we are proud to continue our work together, through the Access Small Business program.