The asset size of an organization is the total footprint of all liabilities and net assets on the balance sheet of the organization. CDFIs can range from as little as a few tens of thousands of dollars, to over a billion dollars. The majority of the organizations presented in this database are between $1 million and $100 million in total assets, though there are certain exceptions at both ends.

In 1994, the federal government established the CDFI Fund as a new program within the US Department of Treasury. CDFIs certified by the CDFI Fund must meet six criteria which include pursuing a primary mission of community development and providing financing as a primary line of business. www.cdfifund.gov

Community development banks provide capital to rebuild economically distressed communities through targeted lending and investing. They are for-profit corporations with community representation on their boards of directors. Depending on their individual charter, banks are regulated by some combination of the Federal Depository Insurance Corporation (FDIC), the Federal Reserve, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and state banking agencies. Their deposits are insured by the FDIC.

Community development credit unions promote ownership of assets and savings and provide affordable credit and retail financial services to low-income people, often with special outreach to minority communities. They are nonprofit financial cooperatives owned by their members. Credit unions are regulated by the National Credit Union Administration (NCUA), an independent federal agency, by state agencies, or both. In most institutions, deposits are also insured by the NCUA.

Community Development Financial Institutions (CDFIs) are specialized financial institutions whose core purpose is to provide financial products and services to people and communities underserved by traditional financial markets.

Community development loan funds provide financing and development services to businesses, organizations, and individuals in low-income communities. There are four main types of loan funds: microenterprise, small business, housing, and community service organizations. Each is defined by the client served, though many loan funds serve more than one type of client in a single institution. Loan funds tend to be nonprofit and governed by boards of directors with community representation.

Community development venture capital funds provide equity and debt-with-equity-features for small- and medium-sized businesses in distressed communities. They can be either for-profit or nonprofit and include community representation.

Financing to community service organizations such as human and social service agencies, advocacy organizations, cultural and religious organizations, health care providers, and childcare and education providers. Uses include acquisition, construction, renovation, leasehold improvement, and expansion loans, as well as working capital loans and lines of credit.

All personal loans to individuals for health, education, emergency, debt consolidation, and consumer purposes. Generally, personal loans for business are classified as microenterprise or business; personal loans for home improvement or repair are classified as housing.

Includes convertible debt, as well as debt with warrants, participation agreements, royalties, or any other feature that links the investment’s rate of return to the performance of the company that received the investment.

Loans payable related to financing. Also referred to as debt capital or investor capital. Funds lent to a CDFI from a third party that the CDFI will relend or reinvest in the communities it serves. Can be below-market or market rates.

Delinquent Loans / Total Loans (including debt-with-equity-features). Delinquent loans are the principal amounts of all loans for which scheduled payments of either principal or interest have not been made on time by borrowers. Delinquent status is presented in categories reflecting the degree of delinquency e.g. principal amount of loans for which payments are 90+ days past due. For loan funds and banks, the delinquency ratio is defined as greater than 90 days (3 months) past due. For credit unions, the delinquency ratio is defined as greater than 2 months past due.

Equity acts as a cushion to protect senior debt investors from losses, helps reduce a CDFI’s cost of funds, and enhances a CDFI’s lending flexibility. The ratio demonstrates what percentage of the CDFI’s total assets comes from equity (as opposed to liabilities and debt). For credit unions, the numerator is net worth (and not equity) which include the portion of secondary capital that for regulatory purposes can be treated as equity.

Since EQ2 has many of the same properties as equity (i.e. protects senior debt investors and enhances a CDFIs financing flexibility), this ratios should be consider in conjunction with the Equity / Total Assets Ratio.

Unsecured debt that has some of the same advantages as equity because it is subordinate to all other debt and carries a rolling term, the investor has a limited right to accelerate payment, and interest is not tied to income. The investing bank also receives advantageous CRA credit. Only loan funds and venture funds have EQ2.

Investments made in for-profit companies in which the CDFI receives an ownership interest in the equity (stock) of the company.

An investment in a for-profit CDFI (typically a community development venture capital fund) where the investor owns a percentage of the equity or shares in the fund and the investor’s return is based on the performance on the fund.

Includes guarantees or letters of credit provided to enhance the creditworthiness of a borrower receiving a loan from a third-party lender.

Financing to affordable housing developers and individuals. Housing financing to individuals is typically loans to support homeownership and home improvement. Financing to developers is for predevelopment, acquisition, construction, renovation, lines of credit, working capital, and mortgage loans to support the development of rental housing, service-enriched housing, transitional housing, or residential housing.

Funds placed in a depository institution by individuals or organizations, typically earning interest and insured by governmental agencies.

The Liquidity or term of an investment option offered by an insitution denotes the length commitment by the investor to the organization. Typical terms range from three months for short term deposits in insured institutions, to 10 years or more for long-term obligations of CDFIs for Equity Equivelents and other products.

Loan Loss Reserves / Gross Loans Outstanding (including debt-with-equity features). Loan loss reserves act as insurance reserves for potential problem loans. They are an estimate of loans (or portions of loans) which may prove to be uncollectible. CDFIs’ loan loss reserve ratios vary depending on the type of lending, quality of portfolio, and historical loan losses. Loan loss reserves typically show up as a contra-asset on the balance sheet.

Market rate denotes a risk adjusted financial rate of return as compared to market instruments of similar term and risk. For example, an insured deposit in a community development bank or credit union that approximated the average rate of return for similar term deposits in other non-community development depositories could be considered "market rate."

Financing to for-profit and nonprofit businesses with five or fewer employees (including proprietor) and with a maximum loan/investment of $25,000. This financing may be for the purpose of start-up, expansion, working capital, equipment purchase/rental, or commercial real estate development or improvement.

Net Loan Losses in FY 2003 / Gross Loans Outstanding (including debt-with-equity features). The net loan loss ratio represents the percentage of the CDFI’s outstanding loan portfolio that has been written off during the year (net of recoveries). This is a key ratio used in the commercial banking industry.

Funds placed in a credit union by individuals or organizations that are not members of the credit union. Nonmember deposits do not confer ownership rights in the credit union to the depositor and are typically limited to a small percentage of a credit union’s total deposits.

Total expenses of the CDFIs less non-operating expenses such as pass-through grants and other one-time or non-operating expenses. Does not include financial or interest expenses.

In addition to housing, microcredit, small business, consumer and community facilities, some organizations provide finance to other CDFI institutions and/or other activities not bounded by the aforementioned categories.

A specific type of capital used only by low-income designated credit unions. It is defined by the National Credit Union Administration as having several key characteristics: uninsured, subordinate to all other claims, minimum maturity of five years, and not redeemable prior to maturity.

A deposit made in a credit union that confers ownership rights in the credit union on the depositor.

Financing to for-profit and nonprofit businesses with more than five employees or in an amount greater than $25,000 for the purpose of expansion, working capital, equipment purchase/rental, or commercial real estate development or improvement.

The number of loans for which principal was outstanding as of the last day of the fiscal year. These loans may have originated during the fiscal year or in a previous year.

Total financing outstanding is the sum of the different financing products that CDFIs have in their portfolio and include: loans outstanding, debt with equity-features, equity investments and guarantees.