April 8, 2022
Funding for program will come from previously announced T-Mobile settlement funds
Carson City, NV - Today, Attorney General Aaron D. Ford announced the approval of the use of $6 million in T-Mobile settlement money to create the first Nevada home-grown Community Development Financial Institution (CDFI) through the Governor's Office of Economic Development (GOED). The use of the money was approved Thursday by the state's Interim Finance Committee.
"I am proud that our settlement with T-Mobile not only protects existing jobs for Nevadans, but also creates new opportunities for enterprising Nevadans to grow their business and create new jobs," said AG Ford. "These settlement dollars will seed a new and much-needed CDFI, and will help stimulate economic growth in low-income communities and communities of color here in Nevada. I'd like to thank the Governor's Office of Economic Development for working with my office to facilitate this investment of settlement funding."
When contract negotiations are completed by the Governor's Office of Economic Development (GOED), the CDFI will operate a direct lending revolving loan program with a focus on small businesses with low or moderate incomes and owned by Nevadans who are minorities and women. These demographics have been historically overlooked by traditional financial institutions, but they are critically important to growing and diversifying Nevada's economy. The lending will include microloans, small business term loans, revenue-based loans and contract-based capital loans. The CDFI's loans will not be forgivable.
"The main goal of the project is to seed a home-grown Nevada CDFI," said Michael Brown, GOED Executive Director. "This U.S. Treasury supported program seeks to nurture entrepreneurship and support other services in low-income and minority communities by channeling money to local institutions that know these communities best."
Under the approved proposal, the expected terms of the loans are as follows:
- Microloans will vary between $1,000 and $10,000, have a rate between 4-8% and a term between 1-3 years;
- Small business term loans will vary between $10,000 and $50,000, have a fixed rate between 4-8% and a term between 1-3 years;
- Revenue-based loans will vary between $10,000 and $100,000, have a fixed rate between 4-8% and a term between 1-3 years; and
- Contract-based capital loans will vary between $10,000 and $150,000, have a fixed rate between 4-8% and a term between 1-3 years
The U.S. Treasury and Department of Commerce provide oversight over CDFI programs and further set the criteria for determining what types of small businesses can receive loans from the Nevada CDFI. The terms of the T-Mobile settlement restrict the lending to minority-and-women-owned-businesses. However, the GOED-contracted CDFI would also require the new or existing businesses to be Nevada-based businesses with a Nevada business license.