WARSAW — Lake City Bank is investing $750,000 in the Community Investment Fund of Indiana (CIFI).

CIFI is a Community Development Financial Institution (CDFI) serving the state of Indiana. Lake City’s investment gives CIFI additional money to make loans to historically underserved entrepreneurs and small businesses that lack access to capital and do not qualify for bank loans.

 CIFI is funded by grants and loans from federal agencies, Indiana banks, and other business organizations. CIFI lends operating and expansion capital to Indiana’s small business owners who cannot get traditional bank financing. Many are from low to moderate income populations and include minority-owned or newer businesses that need additional funding to support growth.

As of the end of 2018, CIFI has loaned $3.4 million and created or sustained more than 120 jobs while providing assistance to more than 90 small companies.

“Our identity as a community bank is firmly engrained in the culture at Lake City Bank,” said David M. Findlay, President and Chief Executive Officer. “As individuals and as an organization, investing in our communities is important to us, and CIFI of Indiana is a perfect way for us to help other businesses thrive.”

Phil Black, CIFI’s executive director, says Lake City Bank’s investment is known technically as an Equity Equivalent Investment. CIFI can count that investment as equity as it builds its balance sheet for further investment from financial institutions and government agencies. CIFI uses funding from Lake City Bank — and other banks — to extend the reach of its bank partners for loans to small businesses too risky for traditional bank financing.  Under the federal Community Reinvestment Act (CRA) banks can benefit from making investments in organizations such as CIFI. 

Black says, “CIFI is grateful for Lake City Bank’s confidence in taking us on as a partner in financing under-served and under-capitalized local businesses. This will help us assist more people in achieving their goals and graduating to regular commercial bank financing.”

Black continues, “Many of our borrowers are the smallest companies that request loans of $10,000 to $50,000 for supporting general working capital needs. They fall under the radar of many other lending programs due to the small size of the loan or the lack of a small business track record.” 

Created in 2010, CIFI was formed through an initiative by the Indiana Lieutenant Governor’s Office and by an investment from the Indiana Housing and Community Development Authority (IHCDA).