Friday, August 28, 2020
Andy Posner, founder and CEO of the Capital Good Fund has introduced a brand new supply of funding — $500,000 — to make below-market, short-term loans to customers who don’t qualify for standard financing for bills associated to the COVID-19 disaster and different key wants, similar to shopping for or repairing a automotive and safety deposits.
Posner joined GoLocal LIVE to offer an outline of the brand new funding.
“We do small-dollar private loans for low-income of us for a few years solely in Rhode Island we’re now operational in 5 states — so quite a lot of current development however we’re designed to be a substitute for high-interest loan merchandise like payday loans, pawnshops, hire to personal … the loans that we make vary from $300 to $25,000 and so they’re mostly used for car buy, restore, refinance, safety deposits,” stated Posner.
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The supply of the brand new funding for the Capital Good Fund is a five-year loan from the Rhode Island Basis’s Affect Investing program that may allow Capital Good Fund to assist a further 250 debtors.
“This investment will enable us to achieve our strategic goals, including increasing the number of Rhode Island families impacted by our products,” stated Posner.
Capital Good Fund will use the funding from the Affect Investing program to supply private loans starting from $300 to $25,000 with a median rate of interest of 14 p.c, which is a fraction of what some so-called pay-day lenders would cost; in actual fact, the utmost allowed rate of interest on a payday loan in Rhode Island is 261 p.c APR.
“Our clients are people who can’t access mainstream loan products for a variety of reasons, ranging from being low-income, having poor credit or simply not trusting the financial system,” stated Posner.
As debtors repay their loans, Capital Good Fund will use the proceeds to repay the Rhode Island Basis with curiosity.
The Capital Good Fund is a substitute for payday lending, pawnshops, or different high-interest loan merchandise. Capital Good Fund is a nonprofit, U.S. Treasury-certified Neighborhood Improvement Monetary Establishment.