The Alliance Endorsement of the Community Advantage Loan Program Act of 2023

July 18, 2023

The Honorable Ben Cardin

Chairman, United States Senate Committee on Appropriations

428A Russell Senate Office Building

Washington, DC 20510

Dear Senator Cardin:

On behalf of the African American Alliance of CDFI CEOs (the Alliance), I am writing to express our sincere gratitude to you for thoughtfully developing this legislation with the reforms we have contemplated for years regarding Community Advantage. The bill makes the Community Advantage program permanent, protects the reforms Alliance members worked on diligently with the Small Business Administration (SBA), and adds increased guaranty support for SBA 7(a) loans. Therefore, the Alliance extends our endorsement of your proposed legislation, the Community Advantage Loan Program Act of 2023. Your bill could codify the SBA’s effective Community Advantage pilot, which provides more protection to ensure this great work continues. While the Alliance believes that it would have been beneficial to extend the capacity to grant loans of up to $750,000 to more than just eight approved institutions, we acknowledge and value the overall effect of the legislation.It instills confidence not only in our community-focused financial institutions, who are motivated by their mission to serve, but also in the small businesses we aid, demonstrating the SBA’s unwavering commitment to increase lending to underprivileged and typically neglected sectors.

The Alliance is a national membership-based organization with a mission to empower Black communities by promoting economic stability, well-being, and wealth. Leveraging a network of 77 Black-led Community Development Financial Institutions (CDFIs), the Alliance is working towards establishing power and promoting equal economic opportunity for Black individuals, families, and communities across all 50 states.

Promoting financial inclusion and ensuring equitable access to capital are pivotal in stimulating economic growth and expansion. Regrettably, entrepreneurs of color often encounter more frequent and pronounced hurdles in gaining access to capital compared to other demographic groups. The issue is complex and deeply rooted in various systemic, socio-economic, and historical contexts. The Community Advantage Loan Program provides a crucial counterbalance to these issues. By facilitating the provision of vital capital to businesses that may be hindered by traditional lending barriers, the program encourages the growth and development of businesses within communities of color, fostering economic equity and opportunity in small-dollar lending. By codifying the Community Advantage Loan Program into law, we believe that we can build on its successes and more effectively bridge the gap between these disadvantaged businesses and the capital they require to flourish.

The Alliance appreciates Senator Cardin’s continued dedication to the Community Advantage Loan Program and its associated lenders. Your efforts contribute to targeted and efficient lending practices, grounded in the notion that all businesses, regardless of their background or circumstances, should be afforded equal access to an inclusive and fair lending ecosystem. We urge Congress to enact this crucial piece of legislation that will strengthen our unified efforts to create a balanced lending landscape, thus enabling the growth of more businesses and stimulating economic development in traditionally underserved communities.