Arcata Economic Development Corporation (AEDC) will be receiving nearly $1.83M* from the U.S. Department of the Treasury as part of the Community Development Financial Institution Rapid Response Program (CDFI RRP) to respond to economic challenges created by the COVID-19 pandemic.
CDFIs are private financial institutions that provide lending to help disadvantaged or underserved communities join the economic mainstream. A CDFI can be a bank, credit union, loan fund, or venture capital fund.
AEDC is a loan fund that serves Humboldt, Del Norte, Mendocino, Lake, Siskiyou, and Trinity Counties. For over 40 years AEDC has provided business loans to clients who may not qualify through traditional lenders. The organization can also provide funding for community facilities and housing projects. AEDC was among the CDFIs that received the largest allocation provided by the Treasury.
“The last time we got a CDFI grant, it was for $750,000,” said Ross Welch, Executive Director of AEDC. “We used that to fund the Open Door Community Health Clinic in Eureka and when that loan paid off, we used the money to help the Northern California Indian Development Council restore the Carson Block Building. The opportunities to help the community with this new, larger grant are very exciting. The funds can be leveraged and revolved, so the impact to an undercapitalized region like ours is even more significant.”
In all, the Treasury Department awarded $1.25 billion in COVID-19 relief funds to 863 CDFIs. The awards were announced on June 15 by Vice President Kamala Harris at the White House with Treasury Secretary Janet L. Yellen.
The CDFI RRP grant funds will be used to support eligible activities such as financial products, financial services, development services, and certain operational activities, and enable CDFIs to build capital reserves and loan-loss reserves. The CDFI Fund designed the program to disperse the funds rapidly in light of the nationwide economic impacts of the COVID-19 pandemic. The CDFI RRP was authorized by the Consolidated Appropriations Act, 2021.
*Actual figure: $1,826,265