The Lafayette Public Trust Financing Authority is creating a new entity to provide access to loans for residents and businesses that may have trouble obtaining financial support from traditional institutions.
The Authority board on Tuesday approved a resolution to create a Community Development Finance Institution entity and has engaged a consultant group, Fund Consulting of Chicago, to assist with developing a business plan.
The LPTFA and the new CDFI entity, Executive Director Kevin Blanchard said, are not related to the North Lafayette Redevelopment Authority, which has been defunct since 2016 and recently attempted to ressurect its board before the Lafayette City Council voted against giving it $250,000 as recommended by Mayor-President Josh Guillory.
No money allocated to North Lafayette Redevelopment Authority
CDFIs, Blanchard said, are federal entities operating under rules developed by the U.S. Department of the Treasury through programs designed to generate economic growth and opportunity in distressed communities.
“The basic premise is to find ways to get financial products and services to communities that don’t always have traditional banking and financing services available to them,” he said.
The authority, Blanchard said, will be able to provide financing to small businesses or entrepreneurs, for instance, who ordinarily may not easily qualify for financing. For example, he said the LPTFA may assist with financing for a small Northside business to expand when it doesn’t have a great deal of collateral.
An existing first-time homebuyer program the LPTFA operates will shift to the CDFI to meet a federal requirement that it participate in eligible financing activities for a year before it is certified, Blanchard said.
The second phase of the CDFI program, he said, involves putting capital into a loan fund. Banks with requirements under the Community Reinvestment Act can put money into the loan fund and receive credit. It will take at least a year to get that phase going.
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The LPTFA has been working with United Way of Acadiana and Lafayette Consolidated Government on the problem of food deserts in some parts of the city without access to fresh food markets and grocery stores. Once the CDFI is formed, Blanchard said, one of the first loan funds can be set up to establish a small grocery store to serve those neighborhoods.
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