A CDFI is a Treasury-certified mission-driven financial institution that provides credit and financial services to underserved communities and borrowers — including SBA Microloans, small business loans, and community development financing for borrowers who don't qualify at conventional banks.
CDFIs are certified by the U.S. Treasury's CDFI Fund (https://www.cdfifund.gov/) and must demonstrate a primary mission of community development lending — serving low-income communities, minority-owned businesses, rural areas, and other underserved markets. CDFIs include community development banks, credit unions, loan funds, and venture capital funds. For small business borrowers, CDFIs are important because they can approve credit profiles that conventional banks decline — lower FICO floors (often 550+), shorter time in business (sometimes 1 year), and lower minimum revenue. The tradeoff is typically smaller loan sizes and rates that may be higher than conventional bank rates but much lower than alternative online lenders or MCA products. SBA Microloan program: CDFIs are the primary delivery mechanism for SBA Microloans — loans up to $50,000 (average about $13,000) for startups and early-stage small businesses. The SBA lends to CDFI intermediaries at below-market rates; CDFIs on-lend to borrowers. Interest rates on SBA Microloans through CDFIs range from roughly 8–13% APR. Beyond Microloans, many CDFIs offer larger business loans ($50K–$500K+), small business technical assistance, and financial coaching — often bundled with the loan to improve repayment success rates. For underserved borrowers who can't access SBA 7(a) or bank term loans, CDFIs are often the most appropriate first step in the financing journey.
The CDFI Fund maintains a searchable CDFI locator at cdfifund.gov. The SBA's Microloan intermediary list (sba.gov/funding-programs/loans/microloans) shows SBA-approved CDFI Microloan lenders by state. Your local Small Business Development Center (SBDC) can also refer you to CDFIs in your area.
$50,000 per SBA Microloan. There is no legal minimum. Average Microloan is approximately $13,000. Terms up to 6 years; can only be used for working capital, inventory, supplies, furniture, fixtures, machinery, or equipment — not real estate or to pay existing debts.
Often faster for sub-$100K loans. CDFIs are set up for community lending with streamlined underwriting for small loan sizes. Many can fund a Microloan in 2–4 weeks. Larger CDFI loans ($100K+) may take 4–8 weeks, which is competitive with conventional bank timelines.