Legislative hearing highlights need to scale MassLEADS, CDFI funding and small-business technical assistance

The Joint Committee on Community Development and Small Business heard unified testimony that state investments in community development financial institutions and small-business technical assistance must be expanded and sustained to meet demand.

Witnesses said Massachusetts has allocated new dollars through the MassLEADS effort but that CDFIs, technical assistance providers and microgrant programs need ongoing funding and clearer implementation to reach micro and immigrant-owned businesses.

The issue came up repeatedly in testimony from state and community leaders. "The MassLEAD includes important supports for small business such as $35,000,000 for community development financial institutions (CDFI) grants," said Deco Jabril, director of small business development at the Executive Office of Economic Development. He told the committee the administration is also setting aside $25,000,000 for small-business technology and $10,000,000 for a small-business match grant program as part of the law the governor signed.

Advocates and CDFI leaders said those sums are a start but not sufficient. "CDFIs are uniquely positioned as trusted partners in local communities, allowing them to provide culturally competent, place-based capital to small and micro businesses," said Yadi de Jesús, director of economic development at the Massachusetts Association of Community Development Corporations. He urged the committee to maintain and increase capital allocated through MassLEADS and to consider a technical-assistance stabilization fund.

Kimberly Lyle, CEO of Dorchester Bay Economic Development Corporation, described the CDFI role at the loan level: her organization makes loans from $5,000 to $250,000 with flexible underwriting that does not require a minimum credit score. "A relatively small loan, like $10,000 to $50,000, can be a game changer for somebody who wants to start a business," Lyle told the committee.

Several witnesses warned of federal uncertainty that could limit CDFI resources. "The CDFI Fund is under pressure at the federal level and that threatens grant and technical assistance resources," Lyle said, noting changes to SBA rules that limit lending to some immigrant-owned businesses.

Advocates asked the committee to restore and protect several state line items during conference, including microbusiness grants and urban agenda grants that were reduced or removed in budget drafts. "We urge you to put the $25,000,000 for CDFIs into the budget and to restore microgrant funding to the line items that were cut," Tracy Whitfield, executive director of the Coalition for an Equitable Economy, told the committee.

Committee members and witnesses asked for written follow-ups, data on federal CDFI support by state and details on how MassLEADS funds will be administered at the municipal and regional level. No bills were voted on during the hearing; the meeting was informational.

The discussion underscored a recurring theme in the hearing: many small and micro business owners lack access to capital and the one-on-one technical assistance needed to become bankable. Leaders asked lawmakers to treat the technical assistance line items as part of the capital ecosystem rather than an optional add-on. "You cannot lend money effectively without sufficient, on-the-ground technical assistance," Yadi de Jesús said.

The committee did not take formal action on funding; members invited written testimony and follow-up documentation from CDFIs and state officials on implementation plans and requested more precise estimates of the unmet demand for microgrants and TA.

For now, advocates said the most immediate steps would be restoring cut microgrant lines in the budget, following through on MassLEADS allocations and creating a stabilization or backstop fund for technical assistance so providers can retain staff when federal awards fluctuate.

The hearing record shows the committee intends to follow up with staff and witnesses and requested written materials to clarify how the MassLEADS allocations will be distributed and how state and federal funding streams will be coordinated.