Joel Mathis

This is in the comments on my Starbucks post, but I think Andrew S. offers some good and interesting commentary that I want to highlight : It really doesn't reduce new and small businesses to charity cases. It treats CDFIs--and the services they provide in the form of technical assistance and low-cost credit--as charity cases which almost all of them have always been. That's the innovation. I think this effort does a good service by recognizing that not all sources of credit are the same and that getting a loan as a small business is not merely a matter of declaring your interest in getting one. If you have a sexy internet company with high growth potential, money can be easy to come by. If you want to start a lawncare business, not so much. The "technical assistance" part of the picture is important as well. There are lots of people with great ideas for starting their own businesses who don't really know how to use debt effectively. Coupling loans with that kind

Joe Nocera highlights Starbucks' new effort in the NYT : Here’s the idea they came up with: Americans themselves would start lending to small businesses, with Starbucks serving as the middleman. Starbucks would find financial institutions willing to loan to small businesses. Starbucks customers would be able to donate money to the effort when they bought their coffee. Those who gave $5 or more would get a red-white-and-blue wristband, which Schultz labeled “Indivisible.” “We are hoping it will bring back pride in the American dream,” he says. The tag line will read: “Americans Helping Americans.” It didn’t take long for Starbucks to find the perfect financial partner: Community Development Financial Institutions, or CDFIs. These are lenders, mostly under the radar, that specialize in underserved communities. Most, but not all, CDFIs are nonprofit, and their loan default rates are extremely low. “We specialize in expending credit, getting paid back, and paying back our investors,