CGF announces partnership with Business Development Co.

PROVIDENCE – Capital Good Fund this month announced a partnership with The Business Development Co. to raise capital to fund thousands of loans in the coming years for low-income Rhode Islanders.
Capital Good Fund, known colloquially as the “Good Fund,” is a Providence-based nonprofit that provides financial services to low-income Rhode Islanders. Through its partnership with The Business Development Co., the duo hope to increase funding for loans, as Good Fund’s grows its loan portfolio.
Navigant Credit Union has joined the effort, making available a $360,000 line of credit partially backed by loan guarantees, according to a press release.
The Business Development Co. has also provided a $40,000 loan guarantee on Good Fund’s behalf, according to the press release.
“With this loan guarantee from [The Business Development Co.] we will be able to significantly expand our loan portfolio, saving Rhode Islanders hundreds of thousands of dollars in interest while building their credit rating an average of 65 points in just six months,” said Andy Posner, founder and CEO of Good Fund.
The Business Development Co., established by legislative charter in 1953, is a non-bank lender that works with financial institutions to provide gap funding to what are often undercapitalized companies, according to its website.
The company is helping Good Fund expand its efforts in an attempt to put competitive pressure on predatory lenders, such as payday lenders and rent-to-own stores that “charge rates as high as 261 percent and frequently trap low-income families in the cycle of debt,” according to the press release.
“The BDC is pleased to support Good Fund’s efforts to assist individuals seeking greater financial autonomy by demonstrating their ability to borrow and repay loans,” said Peter C. Dorsey Jr., president of the company. “The Good Fund’s loan portfolio has established a successful track record and the model uniquely leverages private capital.”
Indeed, Good Fund provides financial and health coaching to low-income families along with personal loans of up to $13,500 and has disbursed 850 loans totaling $750,000 since its inception in 2009.
“This is precisely the kind of public-private partnership the state needs to get back on its feet, grow the economy and ensure equal opportunity for all,” Posner said. “Bringing together financial institutions, quasi-governmental agencies and nonprofits creates a powerful model for positive change in our state.”

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