Business Opportunities in Community Development Lending

Report of a meeting for lenders and nonprofits at Springfield College
November 18, 2011

“When you see the business owner take a chance and put everything on the line and the company expands to be a solid credit, that’s one of the best things you can ask.”

Jeff Sattler, Nuvo Bank & Trust

Community development loans can be profitable for financial institutions.

At this meeting, nonprofits and lenders shared ideas for creatively financing small businesses, economic development, affordable housing and other community development projects.

The consensus: Expect to succeed, although the road to financing can be long.

To cosponsor a meeting on this topic, contact

Slides, handouts and meeting summary.pdf

  • Best practices for borrowers
    (small businesses and nonprofits)
  • Best practices for
  • About the presenting
  • Agenda and

Consensus of the meeting: Best practices for borrowers (small businesses and nonprofits)

  • Work with partners (SBA, municipalities, public and quasi-public agencies, CDFIs, CDEs).
  • It’s never too early to start talking with potential partners.
  • Current economic conditions require creativity.
  • Balance priorities of various partners.

    “We believe in partnerships. We must bring our energies together in a coordinated way.”

    Chris Sikes, Common Capital

  • Have a business plan, understand your industry and competition and assess near- and long-term obstacles.
  • Look at your board composition and governance practices.
  • Tap the knowledge of consultants, attorneys, accountants.
  • Green projects are attractive.
  • Communicate at all stages of the deal.
  • Expect to succeed, although the road to financing may be long.

Consensus of the meeting: Best practices for lenders

  • “The more we know about the risks associated with your business, the better we can mitigate them as we structure the loan.”

    Marian Poe-Heineman, PeoplesBank

    Treat these loans as good business for the bank, not merely a way to satisfy CRA requirements.
  • Partnerships with SBA, community development financial institutions and community development entities can provide financing and structure that makes loans bankable.
  • Collateral may not be equal to loan value, so management experience is vital.
  • Small business owners may need to work with an accountant to substantiate the business cash flow.
  • Encourage business owners to hire experienced attorneys, accountants and advisors.

About the presenting organizations

  • Children’s Investment Fund, a community development financial institution (CDFI), provides grants, early-stage loans and technical assistance for childcare facilities.

    “It’s about more than rehabbing a building that is about to fall down. It’s about creating a community and long-term success for residents.”

    Catherine MacKinnon, Mutual Housing Association of Greater Hartford

  • Common Capital (formerly Western Massachusetts Enterprise Fund), also a CDFI, makes loans from $500 to $300,000 in order to create jobs and eliminate blight.
  • Federal Home Loan Bank provides wholesale funding for member banks to make community development loans and offers technical assistance to nonprofits.
  • MassDevelopment, a quasi-public agency, provides direct loans, guarantees and technical assistance. Loans and participations can be as much as $5 million.
  • Mutual Housing Association of Greater Hartford borrows to advance its mission to provide affordable housing and stabilize 29 communities around Hartford.
  • Nuvo Bank & Trust is a community lender in the Pioneer Valley. Maximum loan size is about $1.5 million.
  • PeoplesBank lends to many nonprofits in Western Massachusetts. Loans cluster around $4 million or $5 million.


The Springfield meeting brought together organizations that provide financing at different stages and showed how they fit together. One affordable housing project, for example, had 16 participants, including 3 banks.

Slides, handouts and meeting summary.pdf


"We like to get into projects early to help avoid costly mistakes and to encourage serious professional project management."

Mav Pardee, Children's Investment Fund

  • DeAnna Green – Director, Financial Institution Relations & Outreach (FIRO), Federal Reserve Bank of Boston

Panel I: Business Opportunities in Small Business and Nonprofit Lending
“Getting to Yes”

  • Jeff Sattler – Nuvo Bank & Trust
  • Chris Sikes – Western Massachusetts Enterprise Fund
  • Marian Poe-Heineman – PeoplesBank
  • Charlene Golonka – MassDevelopment

Panel II: Investment Opportunities in Community Development
“The Collaborative Path to the Deal”

  • Mav Pardee – Children’s Investment Fund
  • Catherine MacKinnon – Mutual Housing Association of Greater Hartford
  • Kenneth Willis – Federal Home Loan Bank

Stay Connected

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Focus on Community Development Lending

Presentations: Business Opportunities in Community Development Lending, November 9, 2012, Meriden, CT.

Meeting Report: Business Opportunities in Community Development Lending, June 8, 2012, Burlington, VT.

Meeting Report: Business Opportunities in Community Development Lending, March 30, 2012, Manchester, NH.

Additional Resources

Slides, Handouts and Meeting Summary pdf

Community Development Glossary offsite

"Recently Certified CDFI Banks and the CDFI Banking Sector," 2011 pdf

CDFIs and Banks: Addressing the Financing Needs of Small Business,” 2011 pdf

Lending to Small Business: The Evolving Bank-Nonprofit Lender Relationship,” 2010 pdf

CDFI Business Lending Grows During Recession,” 2009 pdf

Strength in Adversity: Community Capital Faces Up to the Economic Crisis,” 2009 pdf

Charter School Facilities Finance: How CDFIs Created the Market, and How to Stimulate Future Growth,” 2008 pdf

Not Just a Financial Institution: Measuring Success by Looking at the Double Bottom Line,” 2007 pdf