The U.S. Small Business Administration, in consultation with the U.S. Treasury Department, announced it is setting aside $10 billion of round two funding for the Paycheck Protection Program (PPP) to be lent exclusively by Community Development Financial Institutions. CDFIs work to expand economic opportunity in low-income communities by providing access to financial products and services for local residents and businesses.
A press release said, “These dedicated funds will further ensure 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,” SBA Administrator Jovita Carranza said. “CDFIs provide critically important capital and technical assistance to small businesses from rural, minority and other underserved communities, especially during this economically challenging time.”
Treasury Secretary Steven T. Mnuchin said, “The PPP has helped over 50 million American workers stay connected to their jobs and over 4 million small businesses get much-needed relief. 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 two, combined with $3.8 billion in round one CDFI approvals, will ensure 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.
SBA Atlantic and Mid-Atlantic Regional Administrator Steve Bulger said, “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.”
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.
“As our economy continues to grow and recover, small businesses are the essential fuel to that continued growth,” said SBA Buffalo District Director Franklin J. Sciortino. “We know that America’s small businesses pack the biggest punch, creating two out of every three net new private sector jobs in the U.S. These small businesses are the cornerstone of our communities, so their success and expansion is vital to the nation’s economic growth.”
The press release said, “The SBA and the Treasury Department remain committed to ensuring eligible small businesses have the resources they need to get through this time.”