A survey showed 63% of small businesses faced financial challenges in the previous 12 months, with access to credit being one of the top issues. Traditional lenders often have strict requirements, such as multiple years of financial statements and tax returns, which can be a barrier for small businesses, particularly newer ones.
Community Development Financial Institutions (CDFIs) play a crucial role in bridging this financing gap by providing much needed technical assistance to help small businesses secure access to financing. In fact, a 2019 report found that CDFIs provided over 1.8 million hours of technical assistance to their clients in 2018 alone.
These programs are often resource-intensive, and these CDFIs rely on manual processes that limit the number of small businesses they can support. This article explores how innovative digital solutions are transforming technical assistance programs, enabling CDFIs to scale their impact and create more pathways to success for small business owners.
As demand for their services grows, some CDFIs are already leveraging digital tools to expand their reach and impact. For example, Community Reinvestment Fund (CRF), a national CDFI, has implemented a digital platform that streamlines the loan application process and provides online technical assistance. As a result, CRF has been able to increase its lending volume by 60% and support 50% more small businesses.
(Source: 2021 Federal Reserve survey, Opportunity Finance Network)
Traditional Technical Assistance Challenge
The combined effect of these resource-intensive processes limits the scalability of technical assistance programs. By investing in technology to streamline operations, CDFIs could support more small businesses. This would provide more entrepreneurs with access to the critical support they need to navigate the complex lending process and secure financing for their businesses.
1:1 Business Coaching
Traditionally, technical assistance programs rely heavily on one-on-one business coaching, requiring CDFI staff to spend hours with each entrepreneur on financial management and strategic planning. While this personalized approach can transform individual businesses, it creates significant operational challenges.
Each new client adds substantial demands on staff time, from scheduling and conducting sessions to preparing materials and following up on action items. With limited personnel resources, CDFIs can often support only a fraction of the businesses seeking assistance, leaving many entrepreneurs without access to any resources.
Regular Sharing of Financial Documents
In order to stay informed on the health of the small businesses they’re working with, technical assistance program managers must regularly collect financial statements including balance sheets, income statements, cash flow statements, and tax returns.
However, the process of requesting, receiving, and processing these documents is often slow. By the time the CDFI staff have the information in hand, it may no longer reflect the current financial state of the business. This means that any recommendations or lending decisions made based on this data could be founded on an outdated understanding of the business’s health and needs.
Technical Assistance With Finli
By automating manual processes, CDFIs can deliver more relevant and real-time support to help small business owners reach new heights. This is your opportunity to grow your impact – helping more SMBs succeed than ever before while strengthening local economies. With the same staff resources, you’ll transform more businesses and communities than previously possible.
1. Empowering Businesses Through Digital Tools
When CDFIs parter with Finli, they’re able to provide small businesses with digital business management tools.
This comprehensive suite of tools helps to establish proper business practices for growth and organization. From professional invoicing and digital payment processing to inventory management and customer communications, entrepreneurs can streamline their operations all in one place. This integrated approach ensures businesses maintain organized records while focusing on what matters most – growing their business.
This compliments the real time coaching, and alleviates some of that burden.
2. Real-Time Performance Insights
Finli’s platform gives CDFIs access to real-time data and metrics on how their small business clients are performing. With this data, they can they can make more informed decisions, offer proactive support, and track the impact of their programs in real-time.
CDFIs gain visibility into how their small business clients are performing through live business metrics. Instead of waiting for quarterly reports, staff can monitor cash flow trends, revenue patterns, and customer behavior as they happen.
These insights allow CDFIs to measure the true impact of their programs by tracking actual business growth and success in real-time, while also identifying opportunities to provide targeted support when businesses need it most.
3. Scalable Impact with Fewer Resources
Finli’s digital platform makes technical assistance far more scalable while requiring fewer resources from CDFIs. By streamlining data collection, automating manual processes, and providing real-time insights, Finli empowers CDFIs with data analytics tools to identify trends, anticipate challenges, and spot opportunities for growth across their entire portfolio of small business clients.
Looking Ahead
The future of technical assistance combines the power of technology with the personal touch that makes CDFI programs invaluable. By embracing digital solutions, CDFIs can break free from traditional resource constraints while maintaining the high-quality support that entrepreneurs need to succeed. This balanced approach enables programs to scale their impact without sacrificing the human connection at the heart of technical assistance.
For CDFIs ready to transform their community impact, the path forward is clear. Digital innovation in technical assistance delivery creates more efficient, scalable support systems that help more entrepreneurs build thriving businesses. The result is stronger local economies and more vibrant communities – precisely what CDFIs have always worked towards.
Ready to revolutionize your technical assistance program? Contact Finli today to learn how you can scale your impact while supporting more small businesses in your community.
