The Valley Economic Development Center has purchased a $5 million loan portfolio from a defunct for-profit community development corporation.
The portfolio allows the Sherman Oaks non-profit, known as VEDC, to support growth plans for additional lending in California and to diversify its own small business lending.
The loans were originally given by the California Economic Development Lending Initiative, a for-profit multi-bank loan pool in Oakland that was founded in 1995 and shut down in 2013 due to recession-related losses.
The loans were provided to the service sector and non-profit organizations for the purchase of commercial property and to provide working capital. There was also money provided to other community development institutions.
The VEDC had been a partner with the Lending Initiative to identify leads and package loans when the initiative opened a Los Angeles office in 1999.
VEDC Chief Executive Roberto Barragan said buying the portfolio made sense to continue job creation and retention for the small businesses affected by the closing of the lending initiative.
“Acquiring the CEDLI portfolio allows VEDC to extend capital to the businesses working to create a strong business sector and promote recovery in their communities,” board member Clarence Williams said in a prepared statement.
The VEDC makes loans in amounts between $50,000 to $500,000 to small business in Los Angeles, San Francisco, Chicago, Las Vegas, Salt Lake City, Miami and the New York Tri-State area.