Native CDFI Capital Pool
Information,Webinar, and Application of Interest
Dear Native CDFIs,
As you know, access to affordable capital has been an ongoing challenge for the Native CDFI industry. Over the past couple of years, First Nations Oweesta Corporation has been working diligently to address this challenge by developing a capital pool that will allow us to leverage both our strength and the strength of the industry to harness larger amounts of capital. Through research and outreach across the Native CDFI industry, including working with a Steering Committee of Native CDFIs and interviews with funders, investors, experts, and key partners, we have developed a model for a unique Pilot Native CDFI Capital Pool. This pool is intended to leverage larger amounts of lending capital for Native CDFIs.
The pool will be uniquely structured, relying on a membership-based model. Native CDFI members will invest 5% of their overall loan request into the pool as a cash reserve. Members will then receive up to $1,000,000 in capital. The pilot capital pool would offer members a choice from one of two financing products: (1) a low-interest loan or (2) a higher-interest loan with 10% grant combination. Loans would carry a targeted 10-year term with an interest-only period (most likely two to three years), then amortizing over the remaining term of the loan.
To participate in the pool, you must meet the following criteria:
- Be a certified Native CDFI;
- Have been lending for approximately three years;
- Have at least 2 years of audited financials; and
- Meet additional underwriting requirements.
Statements of Interest will be evaluated on the financial strength of the Native CDFI, the Native CDFI’s ability to take on additional debt (as indicated by net asset and other leverage ratios) and the Native CDFI’s ability to deploy the requested capital amount within one year (as indicated by current pipeline, past deployment, and loan volume growth).
Oweesta will be using its new database, Outcome Tracker, to handle Statements of Interest. Please click the application link below, complete the questions, and an Oweesta staff member will contact you with a link and instructions to set up an account. Once an account is setup, the Statement of Interest can be completed. Please contact Caleb Selby at firstname.lastname@example.org if you have any questions about this process. The Statement of Interest must be completed by end of business day on Friday, August 25.
For more information, we will also host an informative webinar Thursday, August 10 at 12pm MT. There we will lay out more about how the pool will operate, more detailed explanations, and answer questions. If you have any additional questions following this informational webinar, please don’t hesitate to call me at 303.774.8838 or email me at Krystal@oweesta.org.
Please know that this pool is intended to supplement and enhance our existing lending service for Native CDFIs. In order to meet larger investor requirements and demonstrate the viability of a Native CDFI capital pool so that we can continue to attract investor dollars for possible future pools, we have had to set somewhat rigid criteria for membership in this initial pilot pool and it will not be appropriate for everyone. However, we at Oweesta are committed to supporting your Native CDFI in whatever stage of development you are in. We continue to offer our regular lending to Native CDFIs, including start-up loans for emerging CDFIs and capital loans for more mature CDFIs. If you do not meet the qualifications of the capital pool but need lending capital, please contact our Lending and Compliance Manager, Emily Trump (Emily@oweesta.org) to determine which of our other products would best fit your needs.
Chief Operating Officer, First Nations Oweesta Corporation