Providing small loans to businesses and consumers is a core service that distinguishes credit unions from other financial institutions. Credit unions know that microfinance can drive job creation, increase asset building among low and moderate income individuals, provide a pathway for immigrants and reduce poverty in communities across the US. Credit unions have been at the forefront of efforts to provide safe and affordable consumer loan products and alternatives to high cost, predatory loans.
Inclusiv has partnered with the Minneapolis-based Community Reinvestment Fund, USA (CRF) to provide a Small Business Administration (SBA)-compliant business lending solution beneficial to credit unions originating small SBA loans between $25,000 and $5,000,000. The software, developed by CRF, facilitates the origination process--from application to closing--for lender and borrower. Five credit unions, including Alternatives Federal Credit Union, Lower East Side Peoples Federal Credit Union, Neighborhood Trust Federal Credit Union, Case Credit Union and Dakota Plains Federal Credit Union, are currently beta-testing the software in a credit union environment.
CRF designed their software, named Spark, with a focus on the borrower, as well as the lender, experience. While many existing platforms target the lender as the customer, Spark integrates the borrower into the lending process every step of the way. The software also provides automated CDFI Fund reporting for closed loans, a feature that will be of particular interest to CDFI credit unions, plus facilitates the selling of the guaranteed portion of the loan on the secondary market.
The Spark platform uses data from multiple sources to grade the loan as the application is built, reducing processing time. CRF has reduced the processing time on many applications by as much as 40 percent. At present the software supports SBA Small Loan Advantage, Community Advantage, International Trade and full SBA 7(a) loans and is slated to include SBA Express loans soon.
Spark is a cloud-based platform that is secure, modular and configurable to adopt the look and feel of the lender's website. Spark integrates with FICO, Equifax, Google Maps, MS Dynamics CRM, TRF PolicyMap and SBA's E-TRAN Origination system.
Inclusiv received funding from CapitalOne and Citi Community Development to promote business lending in credit unions and to facilitate collaboration as a means of increasing scale and impact. Upon an extensive review of the SBA-compatible offerings in the marketplace, Inclusiv ultimately selected CRF as a partner because of their commitment to community development coupled with the strength of the platform, and the commitment CRF has made to developing a lasting partnership.
For more information about Inclusiv's partnership with Spark, contact Blake Myers at bmyers@inclusiv.org.
Learn more about Inclusiv's Technical Assistance and Consulting Services available to credit union's interested in developing a microlending program.