Sunday, July 14, 2024

Truist teams with N.C. Rural Center on $40 million minority lending program

Truist Financial announced a $40 million initial donation to help establish CornerSquare Community Capital, a new multistate fund formed by the nonprofit N.C. Rural Center based in Raleigh. CornerSquare will support selected community development financial institutions (CDFIs) by purchasing 25% loan participations.

All of the funding will be directed to racially and ethnically diverse small business owners, women and individuals in low- and moderate-income communities, with a focus on Black-owned small businesses. It’s the largest commitment to the CDFI sector in the history of  Charlotte-basedTruist, which was formed last year by the merger of Atlanta-based SunTrust Banks and Winston-Salem-based BBT.

It’s also a big expansion for the N.C. Rural Center, which has offered a variety of lending and small business development programs over the last 30 years, mostly within the state.

CDFIs have gained increased prominence in small business lending as the number of local community banks has dwindled and larger banks focus on bigger, more lucrative customers. They are government-chartered institutions that do not have stockholders.

“We’re thrilled to expand our partnership with Truist on this innovative program to help underserved small businesses with their single largest need – operating capital – during this difficult time,” said Patrick Woodie, the center’s president, in a press release. “The first-of-its-kind fund provided by Truist will allow our selected CDFI partners to do more with their existing capital, enabling them to expand their reach and scope across Truist’s footprint and beyond, while increasing our collective support of historically under-resourced small businesses.”

The initial CDFIs that will participate in the Truist loan fund administered by CornerSquare include:

“As Truist continues to have intentional dialogue around social and racial equity, we’re excited to embrace new partnerships and business endeavors to make a meaningful and positive difference in the communities we serve,” CEO Kelly S. King said in a press release. “We’re proud to support these impactful CDFI partners who share our vision to support underserved communities and provide a sustainable source of funding for racially and ethnically diverse and women-owned businesses that haven’t had access to the traditional lending market in the past.

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