City First Bank, Capital Impact Partners, and CDC Small Business Finance team up to support low-to-moderate income areas in California; Washington, D.C.; Maryland; and Virginia with flexible owner-occupied commercial real estate options via their Small Business Administration 504 First Mortgage program.

The pathway for underserved small businesses owners to obtain affordable owner-occupied commercial real estate mortgages just got easier — thanks to a new loan product meant to help small businesses in low-to-moderate income areas. By working in these disinvested communities, this loan product will also help entrepreneurs of color and female entrepreneurs.

This effort reinforces the shared vision of City First Bank, Capital Impact Partners, and CDC Small Business Finance to address systemic barriers to accessing capital by providing Small Business Administration (“SBA”) 504 First Mortgage loans.

“This is a creative, flexible loan product with competitive rates that is tailored to the needs of entrepreneurs who live in or serve disinvested communities — or who otherwise have been left out due to historical lending practices,” said Ellis Carr, President and CEO of Capital Impact Partners and CDC Small Business Finance, each of which is part of the Momentus Capital branded family of organizations.

This mission-focused SBA 504 First Mortgage partnership is designed to intentionally attract and invest private capital into the low-income neighborhoods and/or minority-owned businesses in the overlapping markets of City First Bank and Momentus Capital in California, Maryland, Virginia, and Washington, D.C.

“City First Bank is thrilled to partner with Momentus Capital and leverage its track record for originating and servicing SBA 504 First Mortgage loans that can benefit our small business customers,” said Brian Argrett, President and CEO of City First Bank, National Association.

“With this partnership, it is our aspiration to provide up to $50 million in initial capital direct from City First Bank, which will be leveraged up to $100 million in capital through the SBA’s 504 First Mortgage program to provide financing for minority small business owners and entrepreneurs seeking to grow their businesses in low- and moderate-income communities,” said Argrett. “Partnerships with other value-aligned institutions are imperative in addressing the racial wealth gap and absolutely fundamental to City First’s mission. Through our partnership, City First and Momentus Capital will be able to collectively expand access to financing for owner-occupied commercial real estate for minority-owned businesses located in our current markets in a way that multiplies our effectiveness and reach.”

Through this partnership, the two organizations have developed a new SBA 504 First mortgage loan product that builds on the longstanding effort by Momentus Capital to offer a variety of SBA first mortgages on a wholesale basis throughout the United States. Wholesale SBA 504 First Mortgage loans are marketed to financial institutions such as regional banks, community development financial institutions (CDFIs), certified development companies, non-bank lenders, and other financial institutions that have a local presence and relationships with borrowers in the community — but who are not able to finance the borrower for a variety of reasons. Those institutions can instead refer those borrowers to this more flexible loan product offered by Momentus Capital and City First Bank, who may be able to provide financing in coordination with the SBA.

“This partnership with Momentus Capital enables us to provide loans to small business customers with terms that are more affordable than typical commercial mortgage loans. The 90% financing, as opposed to conventional financing, enables business owners to retain working capital needed to run and ramp up their businesses,” said John Tellenbach, Executive Vice President, West Commercial Regional Executive for City First Bank.

One of the first loans offered under this partnership helped The Little Butterflies — a child care, daycare and preschool in Pleasanton, California — expand its operations by acquiring a nearby daycare practice’s building. With the expansion, this woman-owned small business will be able to retain all 10 of the existing daycare’s employees, and create 21 new full-time jobs serving its rapidly growing clientele.

Another recently funded project helped beloved authentic Mexican restaurant Kalaveras open an additional location in Corona, California. The financing allowed this Hispanic-owned small business to retain the working capital it needed to ramp up operations; the owners anticipate creating 20 new jobs.

This new product is being offered through Momentus Direct Capital. Loans originated pursuant to an SBA 504 First Mortgage program are designed to preserve cash and cash flow for small businesses through attractive terms, such as low down payments (at 10 percent); 10-year, below-market, fixed interest rates; and a minimum loan amount of $500,000. These advantageous terms for borrowers are made possible by support from the SBA. Loan proceeds may be used to purchase, refinance, or make improvements to owner-occupied commercial real estate.

“I’m excited about this opportunity to develop and deliver a product for these small business owners,” said Ken Rosenthal, Senior Advisor of the Wholesale SBA 504 First Mortgage program for Momentus Capital. Rosenthal is the National SBA 504 Lender of the Year and has more than three decades of experience marketing wholesale first mortgages to lending institutions around the country. “With City First, we are able to use our wholesale first mortgage product to help businesses that have never had the same access to capital as others do, and to help these business owners and their communities.”

For more information, visit momentusdirectcapital.com.

More About Us

Capital Impact Partners, CDC Small Business Finance, and City First Bank are Black-led and have major presences in California and the greater metropolitan area in and around Washington, D.C. In 2021, City First Bank merged with Broadway Federal Bank, f.s.b. to become the largest Black-led Minority Depository Institution (MDI) in the nation, with approximately $1.2 billion in assets as of 3/31/23.

About Momentus Capital

The Momentus Capital branded family of organizations refers to the combined operations of Capital Impact Partners, CDC Small Business Finance, Momentus Direct Capital, Momentus Securities, and Ventures Lending Technologies. While each organization under the Momentus Capital brand still operates as a separate entity, their clients will now have access to more resources and products.

The Momentus Capital branded family of organizations is transforming how capital and investments flow into communities to provide people access to the capital and opportunities they deserve. We are working to reinvent traditional financial systems that have failed to address systemic issues of inequality, economic empowerment, and the widening racial wealth gap by offering a continuum of financial, knowledge, and social capital to help local leaders build inclusive and equitable communities and create generational wealth. This includes a comprehensive package of loan products, impact investment opportunities, training and business advising programs, and technology services that advance locally-led solutions.

Leveraging 80 years of combined experience, nearly $3 billion in assets, and strong community engagement, we have delivered $23 billion in financing, created and preserved 250,000 jobs, and served 12,000 small businesses and five million people across their history.

With headquarters in Arlington, Virginia, and San Diego, California, Momentus Capital operates nationally with a focus on larger urban areas and cities in Arizona, California, Michigan, Nevada, New York, Texas, and the Washington metro area.

Learn more at momentuscap.org.

About City First Bank, N.A.

City First Bank, National Association, a wholly owned subsidiary of Broadway Financial Corporation (Nasdaq-CM: BYFC), collectively referred to as CityFirstBroadway, is a leading provider of financial products and services to economically underserved urban communities.

Backed by 75 years of experience and operations in Washington, D.C. and Los Angeles, California, City First Bank offers a variety of commercial real estate loan products, services, and depository accounts that support investments in affordable housing, small businesses, and nonprofit community facilities located within low-to-moderate income urban neighborhoods.

City First Bank, National Association is part of the City First branded family of community development finance companies, which also includes City First Enterprises, Homes by CFE, and City First Foundation, delivering a robust lending and deposit platform, plus triple-bottom line results: people, planet and profits.

The Bank is a Community Development Financial Institution (CDFI), Minority Depository Institution (MDI), Certified B Corp, as well as a member of the Global Alliance of Banking on Values.

Learn more at cityfirstbank.com.

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