Firing of CDFI Fund Staff Will do Serious Harm to Small Businesses

“Laying off the entire staff of the Community Development Financial Institutions (CDFI) Fund at the U.S. Department of the Treasury is a devastating – if not fatal – blow to a critical apparatus that supports small businesses. This move is particularly baffling given that there is no evidence to suggest eliminating the CDFI Fund will offer any benefit to America’s small businesses or to our economy as a whole.

The CDFI Fund has long had bipartisan support because it has a proven track record of helping the smallest and most vulnerable small businesses. The CDFI Fund is so important because it invests a combination of federal and private dollars in mission-driven financial institutions focused on supporting communities historically lagging in access to traditional financing. Countless small businesses that have launched and grown over the years did so primarily because they received CDFI Fund money after being unable to secure loans elsewhere. This is notable as Small Business Majority’s research found that most small businesses continue to struggle with access to capital – just 36% of small businesses that sought funding in the past year secured any, while 24% said that the amount they received fell short of their needs. What’s more, our research also found 78% of small businesses are concerned about cuts to small business support programs and strongly disapprove (67%) of the administration’s actions to cut government spending. 

With small businesses already struggling under the weight of tariffs, new restrictions and higher fees for U.S. Small Business Administration-backed loans, and rapidly increasing healthcare costs, it’s very clear that gutting the CDFI Fund could not come at a worse time. Instead of raising the already high hurdles entrepreneurs must clear to become successful small business owners, we should be working toward ways to incentivize entrepreneurship and to make it easier to start and grow a business.”