The U.S. Small Business Administration (SBA), in consultation with the U.S. Treasury Department, recently announced that 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). 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 reportedly ensure that the PPP reaches all communities in need of relief during the COVID-19 pandemic.
“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 Jovita Carranza, SBA administrator. “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.”
As of May 23, 2020, CDFIs have reportedly approved more than $7 billion ($3.2 billion in round two) 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.
Details regarding the PPP are available at www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program.
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