The nonprofit program offers fixed, low-interest business loans to people without wealth and high credit scores, “who have been subject to systematic racism.”
WASHINGTON – Former U.S. Comptroller of the Currency and current Ludwig Institute for Shared Economic Prosperity (LISEP) Chair Gene Ludwig, and NACA CEO Bruce Marks announced a lending program for minority-owned businesses.
Economic Justice Loans was created as a model for financial institutions, financial regulators and the government to address economic inequality created by a long-term inability to access capital with favorable terms. The program offers fixed, low-interest loans to people who don’t have wealth and high credit scores, and who have been subject to systematic racism.
Borrowers in the program receive a low 3% fixed interest rate, no fees or closing costs and other favorable terms tailored to fit an individual borrower’s needs. Peer lending committees from within the community will meet each borrower to review the loan application feasibility without consideration of their credit score.
Successful borrowers must demonstrate how their loans will positively affect their communities or address economic and social inequality. The loans are available nationwide, and borrowers will receive funds quickly without “lengthy paperwork, prohibitive credit and collateral requirements, fees and other roadblocks that traditional loan programs require.”
“Low- and middle-income Americans – and minority groups in particular – have long struggled to access capital at anything short of usurious terms with burdensome interest rates and outrageous fees,” says Ludwig. “LISEP is partnering with NACA on this innovative loan program to demonstrate that capital for people who aren’t wealthy doesn’t have to send them further down the economic ladder. Our goal is the opposite. These loans will help people build businesses and improve neighborhoods without saddling them with piles of unaffordable debt.”
“This lending model provides the foundation for hundreds of millions of dollars in additional lending,” says Bruce Marks, CEO and founder of the Neighborhood Assistance Corporation of America (NACA). “We have learned that if you build it they will come. NACA’s Best in America Mortgage, targeting underserved communities, started with a few million dollars in commitment and now has over $20 billion. We expect the same outcome with extraordinary terms and community-based decision process built into the Economic Justice Loans program.”
LISEP was created in 2019 by Gene Ludwig and his wife, Dr. Carol Ludwig. The mission is to improve the economic well-being of middle- and lower-income Americans through research and education, and it seeks to advance the dialogue around policy solutions to improve the well-being of all Americans.
Started in 1988, NACA is the one of the largest Department of Housing and Urban Development-approved nonprofit, community advocacy and homeownership organization in the United States.
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