Charles Schwab Bank, BBVA Compass and Mechanics Bank are among the latest investors in a California microfinance firm that specializes in small-business lending.
Opportunity Fund said Tuesday that it has raised $27 million in new debt financing, led by Schwab. The nonprofit firm uses debt financing from banks and other sources, as well as philanthropic gifts, in order to make loans to small businesses in California.
"Small-business owners simply don't have equal access to healthy funding sources and the necessary resources to help them grow their businesses," Opportunity Fund Chief Executive Eric Weaver said in a press release. "Our goal is to change that."
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Marketplace lending company Lending Club is teaming up with a California-based nonprofit organization to make loans to small businesses that otherwise would have had their applications rejected.
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Illinois, California and New York are all taking initial steps to try to crack down on borrower abuses in the fast-growing digital lending marketplace. The states are facing pressure to intervene because federal agencies have yet to take decisive action.
April 22 - Texas
Microfinance, long an international specialty, is starting to expand its sliver of the U.S. lending pie — and at the same time provide a scoop of opportunity for traditional banking institutions here that cannot afford to offer it directly.
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During its most recent fiscal year, Opportunity Fund lent $60.5 million to small businesses. The loans average $20,000, and they carry annual percentage rates between 8.5% and 18%, according to the firm.
Opportunity Fund and other nonprofit small-business lenders are
