A Win-Win

In addition to their social return, compared to traditional fixed-income investments, community loan funds offer competitive returns, says Chat Reynders of Boston-based Reynders McVeigh Capital Management, adding that he doesn’t know of a single instance where a community loan fund has lost its investors’ money.

“Clients who are investing in this sector typically are getting 2.5% to 4.25% on some of the most recent loans that we’ve made, which would compare quite favorably to what you’re getting in the bond market,” Reynders says. “And compared to what you’re getting on your money market funds now, which essentially is zero, those rates are quite competitive at the moment.”