Capital Good Fund’s Posner Unveils New $500,000 in Loans to Help Transportation and Housing Relief

Capital Good Fund’s Posner Unveils New $500,000 in Loans to Help Transportation and Housing Relief

Andy Posner, founder and CEO of the Capital Good Fund has announced a new source of funding —  $500,000 — to make below-market, short-term loans to consumers who do not qualify for conventional financing for expenses related to the COVID-19 crisis and other key needs, such as buying or repairing a car and security deposits.

Posner joined GoLocal LIVE to give an overview of the new funding.

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"We do small-dollar personal loans for low-income folks for many years only in Rhode Island we're now operational in five states -- so a lot of recent growth but we're designed to be an alternative to high-interest loan products like payday loans, pawnshops, rent to own ... the loans that we make range from $300 to $25,000 and they're most commonly used for vehicle purchase, repair, refinance, security deposits," said Posner.

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The source of the new funding for the Capital Good Fund is a five-year loan from the Rhode Island Foundation’s Impact Investing program that will enable Capital Good Fund to help an additional 250 borrowers.

“This investment will enable us to achieve our strategic goals, including increasing the number of Rhode Island families impacted by our products,” said Posner. 

Capital Good Fund will use the funding from the Impact Investing program to offer personal loans ranging from $300 to $25,000 with an average interest rate of 14 percent, which is a fraction of what some so-called pay-day lenders would charge; in fact, the maximum allowed interest rate on a payday loan in Rhode Island is 261 percent APR.

“Our clients are people who can’t access mainstream loan products for a variety of reasons, ranging from being low-income, having poor credit or simply not trusting the financial system,” said Posner.

As borrowers pay off their loans, Capital Good Fund will use the proceeds to repay the Rhode Island Foundation with interest.

The Capital Good Fund is an alternative to payday lending, pawnshops, or other high-interest loan products. Capital Good Fund is a nonprofit, U.S. Treasury-certified Community Development Financial Institution.