Sen. Chris Coons, D-Delaware, on April 10 called for an expansion of the popular small business Paycheck Protection Program program to help lenders in low-income and distressed communities provide forgivable loans to businesses and nonprofits.
The current PPP program, part of the recently enacted CARES Act, does not allow most community development financial institutions to serve as PPP lenders, disproportionally neglecting the most vulnerable businesses and nonprofits as a result.
Coons is calling for the next COVID-19 relief bill to expand the PPP program and give CDFIs the capital and lending authorities necessary to provide desperately-needed forgivable loans to the small businesses and nonprofits that need them most.
Coons is calling for the next COVID-19 relief bill to provide additional funding for the Department of the Treasury’s CDFI Fund; allow nonprofit CDFIs to take out SBA PPP loans; allow CDFIs to serve as SBA PPP lenders and allocate a share of additional PPP lending to CDFIs — as proposed in Minority Leader Chuck Schumer and Speaker Nancy Pelosi’s Interim Emergency COVID-19 Relief Act; and ensure the Federal Reserve can purchase SBA PPP loans from CDFIs.
“The Paycheck Protection Program is a lifeline for small businesses and nonprofits around the country, but some of the most vulnerable businesses and nonprofits aren’t able to access it, and that has to change,” said Coons. “In the next relief bill, we need to ensure that CDFIs, which serve as lenders to businesses and nonprofits in low-income and underserved communities, can access the Paycheck Protection Program and help our most vulnerable communities weather this storm.”
CDFIs are private mission-driven financial lenders that deliver responsible, affordable lending to low-income, low-wealth and other disadvantaged people and communities. CDFIs are certified by the Department of the Treasury and can be banks, credit unions, loan funds, and venture capital funds. There are more than 1,000 Treasury-certified CDFIs located in all 50 states, D.C., Guam and Puerto Rico.