Fund Earmarks $50 Million for Small Businesses
Feb. 16, 2006--Minority entrepreneurs will soon have more potential capital at their disposal, following the expansion of an investment fund designed to help small businesses.
CRAFund Advisors, a Weston, Fla.-based money-management firm, announced Thursday that it is expanding its $15 million stake in small-business loans to $50 million. The CRA Qualified Investment Fund (CRAIX) focuses on minority communities, as well as communities ravaged by natural disasters such as Hurricane Katrina. CRAIX is the first mutual fund of its kind devoted to investing in community-development projects, according to its managers.
"Over the next six to 12 months, we should have [the $50 million] fully invested," said Alyssa Greenspan, director and portfolio manager for CRAFund Advisors.
CRAIX is a way for potential mutual fund-investors to have a positive impact in the community, Greenspan added.
The fund "greatly improves the liquidity of capital that’s available in the banking system to small businesses," said Mike Stamler, a spokesman for the Small Business Administration. "The more money in the system, the more money there is to lend. It’s a good thing."
New and growing small businesses can obtain money from CRAIX through the SBA's 7(a) loan program, as well as through similar programs from other economic-development groups. The 7(a), the SBA's flagship loan program, was designed to help small businesses that otherwise could not obtain a conventional bank loan and minimizes risk for the lender.
Because the SBA is often a lender of last resort for most small businesses, CRAIX "is an additional means of access to capital," Greenspan said.
Over the past six years, the fund has purchased $1.5 billion in securities that have advanced community development, such as housing, health-care, and job-creation projects in all 50 states.