FSC First, the county’s designated community development financial institution (CDFI), told the Planning, Housing and Economic Development Committee on April 7 that rising interest rates, the end of ARPA grant support and proposed state changes threaten several of its lending programs and its ability to support small businesses.

The nonprofit reported new loan activity and job metrics for the current fiscal year but warned that federal and state funding uncertainties — and a proposed state restructuring of certain funds — could reduce available lending capital.

What FSC First reported
- Loan and jobs activity. FSC First said it closed 34 loans in FY25 so far, supported or created 404 jobs and deployed about $7 million in loans. Non‑EDI net loan program income was projected at about $196,000, a 15.2% decrease from FY25, the agency said.
- EDI fund performance and available balance. FSC First reported conditional and conventional EDI loans in its portfolio and said there is roughly $14.4 million available to re-lend from the fund. Staff also highlighted that, as loans repay, approximately $1 million in principal returns to the fund each year. The organization described the EDI fund as at its lowest fund balance in the program’s history and cited a need to preserve flexible capital for small-business technical assistance and lines of credit.
- Revenue, grants and programs at risk. FSC First’s budget memo showed the county grant is projected about 5% below the FY25 approved budget and the overall FSC First budget down about 1%. The organization flagged possible cuts to the SBA Community Advantage and other federal programs and described a potential 50% reduction proposed in the Maryland General Assembly to the state VLT Flex Fund that supports one of FSC First’s most flexible lending pools.

Administration and OMB commentary
- OMB/EFR discrepancy on EDI fund balance. Brent Johnson of the county’s Office of Management and Budget (O&M B) reported a different closing balance in the county’s AFR: an EDI fund ending balance of $31,000,006.39 for FY24 and an estimated FY26 ending balance of $23.8 million in the proposed budget book. FSC First and OMB staff said timing differences and accounting treatments deserve further review; committee members asked OMB and FSC First to reconcile the figures.

Committee questions and follow-up
Committee members pressed FSC First on: how much EDI lending occurs inside the Beltway (a county policy target), how quickly EDI principal turns over to the fund (FSC First estimated $1 million per year), and how FSC First prioritizes restaurant and other higher-risk startups. FSC First said it will provide district‑level and inside‑the‑Beltway breakdowns and noted that projects vary widely; it also said new line‑of‑credit products were being launched.

Why it matters: FSC First is a principal conduit for county EDI dollars and other loan programs designed to support local small businesses. Cuts to federal and state programs and lower revenue from some loan streams would reduce the organization’s capacity to make loans and provide technical assistance, committee members were told.