Community Development Business Financing on the Chopping Block

Community Development Business Financing on the Chopping Block

By Lesley Girouard

On Friday, October 10, 2025, the Acting Director of the OMB, Russ Vought, issued Reduction-in-Force notices to staff with the Community Development Financial Institution fund (CDFI).

But what is the CDFI, and why is this newsworthy?

Created in the 1990s, this smallish Executive Branch department is part of the U.S. Treasury Department. The original initiative intended to bring financing to underserved communities, like Chicago’s South Side institutions like Chicago's Shore Bank, and in rural Arkansas with the creation of Southern Bank in Arkansas. For many years, it served those communities well. However, with the Administration's focus on reducing government waste through the Department of Government Efficiency, many in Washington determined that funding had become ideological and not purely for economic development.

As President of the Executive Branch, President Trump is fully empowered to make these sorts of staffing changes; however, opponents to his agenda feel this may cripple some lending institutions’ ability to fund community loans. Many credit unions depend on these funds to support their local communities, so there is legitimate concern that their ability to provide necessary financial resources may shrink, impacting their carefully built relationships with their depositors.

Despite the closure of the CDFI, there are opportunities for underserved communities to gain access to business capital and investment opportunities through other means, like Opportunity Zones for real estate development.

Financing options have expanded in recent years, making the need for government funding only one of many paths business owners can use to build businesses and invest. Acquiring financing for equipment, stabilizing cash flow with invoice or receivables financing, or even funding fix and flip real estate has become easier for smaller players now.

CAPITAL ROW FINANCIAL

If you are looking for alternative financing, Capital Row Financial works with more than 30 lenders across the country to offer a large variety of financing options that have been vetted to ensure the lenders are reputable. We love working with smaller businesses where financing can fuel their growth stories. Capital Row Financial–where your goals come first.

If you would like more information on our lending programs, please reach out to Lesley Girouard, Regional Account Executive by emailing her at lesley@capitalrowfinancial.com, or by calling (817) 991-4267.

Call or text: (817) 991-4267

Email: info@capitalrowfinancial.com

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