Interested Party Testimony on House Bill 96 before the House Development Committee

Summary

Interested party testimony on House Bill 96, the main operating budget for fiscal years 2026 and 2027, presented Wednesday, March 5, 2025 to the Ohio House Development Committee by the President of Village Capital Corporation, a Cleveland-based CDFI. The testimony asks the Legislature to include a new proposed $50 million CDFI Fund Program in House Bill 96. It describes CDFIs as mission-driven lenders certified and regulated by the U.S. Department of Treasury and says Village Capital Corporation lends to small businesses, developers and nonprofits, primarily in Cuyahoga County. It cites Michigan's creation of a $75 million Michigan CDFI Fund in 2022 and later allocations of $19 million and $5 million, and notes that the Ohio Department of Development has run a CDFI Loan Participation Program for small business borrowers since 2022.

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Full text

House Development Committee
Interested Party Testimony, House Bill 96 (Stewart)
Dione Alexander, President, Village Capital Corporation
Wednesday, March 5, 2025

Chair Hoops, Vice Chair Lorenz, Ranking Member Abdullahi and members of the House
Development Committee, thank you for the opportunity to present Interested Party Testimony on
House Bill 96, the main operating budget for fiscal years 2026 and 2027.

My name is Dione Alexander and | am the President of Village Capital Corporation, a Cleveland,
OH-based CDFI. | am testifying today to respectfully request the Legislature include a new
proposed $50 million CDFI Fund Program in House Bill 96, the state’s Main Operating Budget.

Community Development Financial Institutions, or “CDF ls” are mission-driven lenders. My
organization is a loan fund, along with another dozen or so in Ohio and hundreds across the
country. We are certified and regulated by the U.S. Department of Treasury.

My CDFI, Village Capital Corporation, lends to small businesses, commercial real estate
developers, community development corporations, and nonprofits and primarily serves
Cuyahoga County though we have worked in Summit, Mahoning, and Trumbull counties.
Despite lending and working with borrowers who might not qualify for traditional bank loans or
might need flexible capital to help incentivize bank lending, Village Capital Corporation has
historically had low default rates. We manage a healthy loan portfolio by providing consistent,
personal engagement with borrowers and community stakeholders.

The demand for more personalized and patient capital is great and CDF ls often get referrals
from banks and return to the banks a more loan-ready, long-term customer. In order to serve
more Ohio businesses, CDFIs need access to more capital available for lending and resources
to provide technical assistance and financial education to borrowers.

Michigan's Legislature saw similar trends and wanted to do something that would encourage
more entrepreneurs, build more housing units, return under-utilized commercial properties to
use, and expand existing businesses. In 2022, Michigan created a $75 million Michigan CDFI
Fund for the loan funds operating in Michigan. In 2023, Michigan allocated another $19 million
to fuel investment in rural and low-income areas, and last year, Michigan allocated an additional
$5 million to its CDFI Fund.

The Ohio Department of Development already works with several CDFls in Ohio. Since 2022,
ODOD has run the CDFI Loan Participation Program. This program, per federal guidelines, is
specifically for small business borrowers.

We are now asking the Ohio General Assembly to follow other states, like Michigan and New
York, and invest in all CDFI loan activity: small business lending and real estate lending.

A $50 million grant to the members of Ohio’s CDF| Network will get lent out over and over,
having much greater and longer-lasting impact than a one-time grant to a small business owner
or housing developer.

. Chair Hoops and members of the House Development Committee, thank you for the opportunity

to provide interested party testimony on a tool that will have ongoing impact throughout Ohio for
years to come.

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