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Community Financial Institutions Get First Crack at PPP

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The U.S. Small Business Administration, in consultation with the U.S. Treasury Department, re-opened the Paycheck Protection Program (PPP) loan portal today. SBA is continuing its dedicated commitment to underserved small businesses and to addressing potential access to capital barriers by initially granting PPP access exclusively to community financial institutions (CFIs) that typically serve these concerns.

When the PPP loan portal re-opened today, it initially accepted First Draw PPP loan applications from participating CFIs, which include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs) and Microloan Intermediaries. These lenders made up approximately 10 percent of all PPP participating lenders in 2020. A First Draw PPP loan is for those borrowers who have yet to receive a PPP loan before the program closed in August 2020.

On Jan. 13, 2021, participating CFIs may begin submitting application information to SBA for Second Draw PPP loans. A Second Draw PPP loan is for certain eligible borrowers that previously received a PPP loan, generally have 300 employees or less, and has suffered a 25 percent reduction in gross receipts. At least $15 billion is set aside for additional PPP lending by CFIs.

Updated PPP Lender forms, guidance, and resources are available here.

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