Ten billion dollars in Paycheck Protection Program (PPP) Round 2 funds are being set aside to be lent exclusively by Community Development Financial Institutions (CDFIs) in an effort to boost businesses in underserved communities.
This dedication of funds is designed to make sure that PPP money reaches all communities that need relief during the coronavirus pandemic, the U.S. Small Business Association announced Thursday in consultation with the Department of the Treasury.
CDFIs through May 23 had approved more than $7 billion in funding for PPP loans, $3.2 billion of which had been awarded during Round 2. Thursday’s announcement dedicated an additional $6.8 billion to CDFIs during Round 2.
CDFIs work to expand economic opportunities in low-income communities by providing access to financial products and services for local residents and businesses.
“CDFIs provide critically important capital and technical assistance to small businesses from rural, minority, and other underserved communities, especially during this economically challenging time,” SBA Administrator Jovita Carranza said in a news release.
Congress established the PPP to provide relief to small businesses during the coronavirus pandemic as part of the Coronavirus Aid, Relief, and Economic Security Act, P.L. 116-136. PPP funds are available to small businesses that were in operation on Feb. 15 with 500 or fewer employees, including tax-exempt not-for-profits, veterans’ organizations, Tribal concerns, self-employed individuals, sole proprietorships, and independent contractors. Businesses with more than 500 employees in certain situations also can apply for loans.
The forgivable loans were designed to help employers keep their employees paid and support their organizations facing economic hardships created by the coronavirus pandemic.
The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.
For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.
—Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA’s editorial director.