My Remarks at the 2024 Small Business Finance Forum
My remarks as delivered at the Opportunity Finance Network’s 2024 Small Business Finance Forum in Chicago, Illinois.
June 13, 2024
Good morning and welcome to Chicago!
Where’s my folks from Chicago in the house?
How’s everybody doing?
I want to start by thanking our team.
First, our wonderful Board Chair Donna Gambrell and OFN’s outstanding Board of Directors. Thank you for your leadership and your partnership.
I also want to thank the incredible OFN staff and event team. They went through the pain staking details and herculean efforts to design and deliver a high impact convening for all of you. They even made sure that you had beautiful weather this week.
Thank you, team.
And I want to thank our sponsors for their support for this convening, in particular our friends at JPMorgan Chase who are the Lead Sponsor for this year’s Small Business Finance Forum.
And last, but certainly not least, I want to thank all of you who are in attendance today. Whether you are an OFN member or soon to be one, a funder or investor, a partner or supporter, I want to thank you for gathering here today and for your commitment to the success of small businesses across the country.
REFLECTIONS
Two weeks ago, I celebrated my one-year anniversary serving as President & CEO of OFN.
I celebrated the milestone in two ways.
First, I took a long overdue nap. Never underestimate the power of a good nap.
And second, I took the opportunity to reflect on the past year, where I began this journey with you a year ago, and the importance of this year itself, 2024.
It was last year, at our 10th Small Business Finance Forum, that we celebrated our largest gathering. That milestone has been eclipsed, and I am pleased to share with you that this is our largest Small Business Finance Forum yet.
When we first held this event in Chicago 11 years ago, 149 people gathered together, understanding the importance of small business to the community development finance industry. Today, we gather as nearly 600, that’s 3x growth, from communities all across the country, together in common cause to meet the moment ahead.
What’s important, however, is not the number of attendees. It’s the why we gather.
MADE FOR THIS MOMENT — CHALLENGES AND OPPORTUNITIES AHEAD
We know the challenges ahead are greater and more complex, and I know we’re all clear-eyed about the challenges facing us and the small businesses we serve.
We know that inflation has increased the cost of doing business and has eroded the purchasing power of so many households, communities, and small businesses to buy the essentials.
Our government partners have been actively slowing inflation, an effort that’s led however to higher interest rates and more expensive capital for our organizations and the small businesses we serve.
We’re only a few years removed from the pandemic shutdowns, and the complexion of our downtowns and Main Streets has changed, as we all are navigating hybrid work realities and shifting consumer behaviors.
The policy environment is changing. From programs designed to support underserved entrepreneurs, to changes in tax policy to the potential implications of elections in November, the rapidly changing policy environment is forcing complex conversations about the way we implement and frame our work.
And, of course, our environment itself is volatile. Our climate isn’t changing…it’s changed. So 2023 has the dubious distinction of conclusively being the hottest year ever recorded, and possibly the coldest year of the rest of our lives.
Our challenges have become greater and more complex, but so have we.
The purpose of us gathering, is that we can support each other in meeting this moment, because we are made for this moment.
Our accomplishments as an industry, our growing strength and impact in supporting small businesses show that we are made for this moment. We should be excited about the future and how we’re positioned to meet it because we also have history on our side.
Twenty-five years ago, in 1999, 81 OFN members made 1,900 small business loans, deploying nearly $83 million to entrepreneurs. 20 years later, in 2018, 138 OFN members made 98,000 small business loans totaling $915 million.
Just four years later, in 2022, 174 OFN members made 157,000 small business loans totaling more than $1.8 billion and created or retained more than 205,000 jobs in communities across the country! Give yourselves a round of applause.
Our ambition as an industry and readiness for the moment, has required us at OFN to also align our ambitions to ensure that we are also ready for this moment. The work you do not only inspires us but fuels our ambitions and underpins the success we have experienced as an organization.
In 2020, we launched the Finance Justice Fund, and can celebrate that crossed the $200 million mark for capital deployment to over 150 members, with more than 50% of capital in the last two years deployed to CDFIs with less than $25M in assets.
We’ve grown our membership to over 410 members and solidified our network as the largest and most diverse in the community development finance industry.
And, OFN now manages over $1 billion in total assets, solidifying our position as one of the nation’s leading intermediary investors in community development finance.
If we’re clear-eyed about the challenges and have a deep sense of who we are and the accomplishments we can celebrate, we must also be clear-eyed about the unprecedented opportunities ahead of us, and who we must become to confront the challenges ahead.
I believe firmly that what got us here, won’t get us there.
It is a mantra I use with the OFN team in recognition that two truths can be right at the same time. It is important for us to celebrate what we have done. Our work is often thankless, and most days the reward for great work is more work.
We can celebrate what we have accomplished, but there is more to be done. And there are ways that we must be different to meet the moment and leverage opportunities today so that we can confront the challenges of tomorrow.
We have designed the Small Business Finance Forum to help you leverage the opportunities ahead.
I think you all have heard by now about this small program called the Greenhouse Gas Reduction Fund.
GGRF represents a bold investment, $27 billion, that will not only combat the climate crisis but also improve health outcomes, lower energy costs, and create high-quality jobs, while strengthening our country’s economic competitiveness and ensuring our energy security.
The success of this initiative was placed on our shoulders. This was the fullest recognition that for this $27 billion to leave no community behind, CDFIs are needed to ensure its success.
We will have to be different and embrace new strategies. We will have to develop, together, new pathways for the challenges ahead. To confirm, we are in uncharted territory, where we have for the first time an intentional focus on combining two segments of finance, community development finance and climate finance, to build a new industry, community development climate finance.
With OFN’s history, and my firm belief that we are made for this moment, it was no surprise for me that OFN not only received an award under the Clean Communities Investment Accelerator, but that we received the largest award.
Last year at OFN39 in Washington, DC, I issued a call to action to all of you that, by 2028, 100% of CDFIs become climate lenders, that your focus becomes greenhouse gas reduction, which means for all of you here, that we need you to keep providing capital to small businesses, but to also make greenhouse gas reduction your focus.
Through our partnership with EPA, we are bringing $2.3 billion to help you get there.
OFN, like all of the other GGRF selectees, is working closely with our partners at the EPA to negotiate and finalize budgets, workplans, and direction so that we can launch the program in the coming months.
We know that you have questions, and we have launched a new online hub that will keep you up to date as we finalize guidance — climate.ofn.org.
It is an understatement to say that GGRF is an important opportunity because of how critical it is to our future, but this moment includes so many other opportunities that we have the responsibility to seize.
This year we have invited our friends at Treasury, along with the Aspen Institute and industry partners, to discuss advances made to improve and help more CDFIs access opportunities through SSBCI, the State Small Business Credit Initiative.
Remember when $10 billion used to be a lot of money?
SSBCI represents a $10 billion investment opportunity to drive small business growth through financial capital and technical assistance. We need to work with Treasury and state partners across the country to put these resources to work in our communities.
These are just two public sector programs that represent over $37 billion worth of capital opportunities. We know there are plenty more spanning public, private and philanthropic sources. We will need embrace new methods for capital absorption and new ways of thinking about growth to scale the industry.
EMBRACING CHANGE AND INFRASTRUCTURE FOR SCALE
It used to be that the only constant for our work was change, but now we know better, that there are two constants, change and disruption.
It was 5 years ago that I shared with you from this stage my father’s journey and the impact of drugs and incarceration on my family. It was because our focus during the 2019 Small Business Finance Forum was expanding pathways to entrepreneurship and its power to create economic mobility for those left behind. Little did we know that only 9 months later our complete focus as an industry would turn to not just making sure one community was not left behind but mobilizing for the complete survival of small businesses all across the country.
The last several years have called for our industry to mobilize capital needed to support communities in unexpected ways. It set the stage for where we are today.
For the years ahead, we must embrace the possibilities of a future that may include unprecedented opportunities and unthinkable challenges. So, the question for me is no longer whether we are made for the moment. I believe without question that we are. The question now is what do we need to do to meet the moment, the new moments ahead. The unknown threats.
OFN has reached the end of its existing strategic plan, and in the coming months we will begin laying the foundation for building a new strategic framework — Infrastructure for Scale. As we reach this 40-year milestone for development of the industry, we have to create a new blueprint to build the community development finance industry for the future.
We will work closely with you to create a new plan for investing in strategies to adopt new structures, systems, and solutions to scale the industry.
In leading a CDFI before my arrival at OFN, I remember the lonely journey of trying to scale, and the recognition that more capital actually isn’t the issue for growth. It’s all the other things.
It’s the recognition for me as well, that we have to shift the paradigm of pushing CDFIs to scale versus creating a new focus on scaled solutions.
This is so we can honor the fact that we need small CDFIs and large CDFIs to meet the needs of communities.
We need to invest in greater innovations, and industry-based productivity and efficiency tools. This is in addition to leveraging technology systems, like solutions offered by our friends at CRF, and leveraging new tools and technologies like artificial intelligence.
We need to invest in and embrace approaches like Scale Link, a promising secondary market and liquidity solution for small business micro-lenders, in addition to new product development, and workforce solutions to fully unlock the industry’s capacity for impact.
We need to invest in new structures for capitalization, mobilization, and policy influence to catalyze a new set of resources, organize the industry, deliver and sustain industry growth, and combat policy and legal threats.
Infrastructure for Scale will be at the center of OFN’s strategic agenda over the next year.
In alignment with this approach, OFN will be leveraging the infrastructure for scale model to build a new small business practice, working with you to create an ecosystem of support with new systems, structures, and solutions designed to help you scale.
Our future is bright, and I could not be more excited for what’s to come.
I believe that we are a key part of the solutions to the greatest challenges ahead.
What a year it has been, thanks to you all for your extraordinary efforts!
I am proud, humbled, and grateful to be here with you.
Let’s get to work!
###
