The U.S. Small Business Administration, working with the U.S. Treasury Department, has set aside $10 billion of the Round 2 funding for the Paycheck Protection Program to be lent exclusively by Community Development Financial Institutions (CDFIs).
According to the SBA, 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 more communities in need of relief during the COVID-19 pandemic, the SBA said.
“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.”
As of May 23, 2020, CDFIs have approved more than $7 billion ($3.2 billion in Round 2) in PPP loans. The additional $6.8 billion 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.