While the federal government does not provide grants for starting or growing small businesses, it does provide a myriad of services to assist entrepreneurs in pursuit of their dreams. One of the mechanisms in place to promote small business growth and economic development is the Community Development Financial Institution Fund managed by the US Department of the Treasury. In the current fiscal year the federal government is allocating more than $12 Million to support CDFIs.
Community Development Financial Institutions fall into four categories:
The genesis of the Community Development Financial Institution Fund was the Riegle Community Development and Regulatory Improvement Act of 1994. The reason for the fund's existence is to foster economic revitalization and community development.
The Small Business Administration has constituted the Secondary Market Lending Authority program, one which aims to provide liquidity for the secondary market, thereby ultimately encouraging new lending opportunities from banks of Small Business Administration guaranteed loans.
A Community Development Credit Union, more commonly known as a CDCU, is a credit financial institution which owned and controlled by its members in an effort to sustain the ability of being able to provide a wide array of financial services.