Earlier this year, we documented the harsh reality of predatory lending in Fort Worth through our blog “Predatory Lending in Fort Worth: Payday and Auto Title Loans.” The data revealed a troubling landscape: 59,891 new payday and auto title loans issued in the Fort Worth-Arlington area in 2023 alone, with borrowers paying $78 million in fees—38% of the total loan volume. Auto title loan repossession rates have climbed to 30%, meaning nearly one in three borrowers lose their vehicles.
But what if there was a different way? What if small-dollar lending could help families build financial stability rather than trap them in cycles of debt?
Capital Good Fund: Proving Affordable Small-Dollar Lending Works
Founded in 2009, Capital Good Fund has spent more than 15 years demonstrating that small-dollar lending can be both mission-driven and financially sustainable. This nonprofit Community Development Financial Institution (CDFI) operates across 11 states with a mission to create pathways out of poverty through inclusive financial services.
To date, Capital Good Fund has deployed over $49 million through more than 15,600 loans nationwide, maintaining a 97% overall repayment rate. Since 2023, they have provided more than 2,100 small-dollar personal loans totaling $1.9 million to Texas borrowers alone.
Their Impact Loans represent a fundamentally different approach to small-dollar lending. Rather than exploiting financial vulnerability, these loans are designed to serve individuals excluded by traditional financial institutions—those who are underbanked, credit-invisible, or struggling to meet basic household needs.
The Stark Mathematics of Fair Lending
The difference between predatory lending and Capital Good Fund’s approach becomes clear when examining actual costs. Consider a typical $1,000 borrower:
Traditional Payday Lender:
- Repayment period: 3 months
- Total cost: $1,500 in additional interest and fees
Capital Good Fund Impact Loan:
- Repayment period: 15 months at 12% interest
- Total cost: $81.80 in interest and fees
- Borrower saves: $1,418
For families living paycheck to paycheck, $1,418 represents substantial resources that can be used for basic needs, emergency savings, or investing in their children’s education.
Building Credit, Not Destroying It
Impact Loans include several features that support borrowers in ways that predatory products do not:
- Transparent terms: 15-month repayment period with fixed 12% interest rate
- No hidden fees: No application, closing, prepayment, or late fees
- Credit building: Payments reported to all three major credit bureaus, with borrowers seeing average credit score increases of 40 points
- Ongoing support: Payment planning, refinancing, and hardship accommodations available throughout the loan term
- Financial Coaching: Borrowers are given the opportunity to participate in financial coaching through Capital Good fund’s online program
- Quick access: Funds typically available within 2-3 business days
Traditional lenders rely primarily on credit scores to determine loan qualification and terms. Capital Good Fund underwriting evaluates financial capacity based on bank statements, household budgets, and financial goals. They don’t require minimum credit scores or collateral.
Meeting Real Community Needs
The loans can address financial emergencies and opportunities that working families face daily. Borrowers use Impact Loans for car repairs, medical emergencies, rent deposits, utility bills, educational technology, or to pay off existing predatory debt. The demand demonstrates the community need: Capital Good Fund received 2,341 new loan applications from across Texas in 2025 alone.
Capital Good Fund’s borrower demographics are similar to those of payday lenders:
- 93% are low-to-moderate income with average household income of $49,026
- Average FICO score of 590, with 10% having no credit score at all
Expanding Access in North Texas
Capital Good Fund’s expansion across Tarrant County and North Texas represents an opportunity to provide alternatives to the 87 payday lenders currently operating in the Fort Worth-Arlington area. The organization plans to deploy at least 1,000 small-dollar loans averaging $1,000 each over five years in the region, with the projected impact:
- 1,000 North Texas residents gaining access to affordable credit
- $1.8 million in cumulative savings compared to high-cost alternatives
- Credit score improvements averaging 40 points for borrowers
- Increased community economic impact as families spend less money on debt service
This expansion is supported through strategic partnerships, including a program related investment and grant from Rainwater Charitable Foundation, that enable Capital Good Fund to leverage additional working capital and strengthen their loan loss reserves to serve higher-risk borrowers responsibly.
An Innovative Model for Change
The Capital Good Fund operates with default rates of up to 20% among their higher-risk borrowers, but rather than passing these costs on to clients through higher fees, they absorb potential losses through carefully managed loan loss reserves funded by philanthropic partners.
This model allows them to maintain lower interest rates. Their evidence-based practices, grounded in community development finance and behavioral economics research, align with best practices promoted by the Consumer Financial Protection Bureau and other leading organizations.
Beyond Individual Loans: Systems Change
Capital Good Fund’s work represents more than just an alternative lending product—it demonstrates how the small-dollar lending ecosystem could operate differently. By proving that offering affordable credit can be both mission-driven and sustainable, they challenge the fundamental assumptions that underpin predatory lending.
For more information about Capital Good Fund’s Impact Loans, visit www.capitalgoodfund.org. To learn more about predatory lending in Fort Worth, read our original analysis here.
