SBA, Treasury Department Set Aside $10B for Community Development Financial Institutions

On May 28, 2020

Today, the U.S. Small Business Administration, in consultation with the U.S. Treasury Department, announced that it is setting aside $10 billion of Round 2 funding for the Paycheck Protection Program (PPP) to be lent exclusively by Community Development Financial Institutions (CDFIs).  CDFIs work to expand economic opportunity in low-income communities by providing access to financial products and services for local residents and businesses.  These dedicated funds will further ensure that the PPP reaches all communities in need of relief during the COVID-19 pandemic – a key priority for President Trump.

“The forgivable loan program, PPP, is dedicated to providing emergency capital to sustain our nation’s small businesses, the drivers of our economy, and retain their employees,” said SBA Administrator Jovita Carranza. “CDFIs provide critically important capital and technical assistance to small businesses from rural, minority and other underserved communities, especially during this economically challenging time.”

“The PPP has helped over 50 million American workers stay connected to their jobs and over 4 million small businesses get much-needed relief,” said Treasury Secretary Steven T. Mnuchin.  “We have received bipartisan support for dedicating these funds for CDFIs to ensure that traditionally underserved communities have every opportunity to emerge from the pandemic stronger than before.”

The $10 billion set-aside in Round 2, combined with $3.8 billion in Round 1 CDFI approvals, will ensure that entrepreneurs and small business owners in all communities have easy access to the financial system, and that they receive much-needed capital to maintain their workforces.

“Providing American businesses with access to federally-guaranteed capital ensures underserved communities are not left out of our COVID-19 recovery. No longer will small business owners in underserved communities just hear about the money. With today’s action, more minority-owned small businesses will be able to access it to survive, thrive and help support our economy,” said SBA Atlantic and Mid-Atlantic Regional Administrator Steve Bulger.

According to SBA New Jersey District Director Al Titone, small business owners from New Jersey, New York and Pennsylvania may use the CDFI locator https://ofn.org/cdfi-locator to find CDFIs that are currently active in the Paycheck Protection Program in their state.

The Paycheck Protection Program was created by the Coronavirus, Aid, Relief, and Economic Security Act (CARES Act) and provides forgivable loans to small businesses affected by the COVID-19 pandemic to keep their employees on the payroll.  To date, more than 4.4 million loans have been approved for over $510 billion for small businesses across America.

The SBA and the Treasury Department remain committed to ensuring eligible small businesses have the resources they need to get through this time.

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