Build Back Better Plan Partners with CDFIs: Focus on Small Business
Jennifer A. Vasiloff
CDFIs play a critical role in strengthening America’s physical and financial infrastructure. In remarks during the 2021 OFN Virtual Conference, SBA Administrator Isabel Guzman underscored the importance of the Administration’s partnership with the CDFI industry in reaching very small, minority and women-owned businesses, and those located in rural or high poverty communities.
As was demonstrated in the Paycheck Protection Program (PPP), your lender matters. With the PPP and in all their small business lending, CDFIs have been successful in serving customers ignored by bigger lenders.
The road to recovery is challenging for our nation’s small businesses. OFN supports the Build Back Better provisions recommended by the House Small Business Committee that would direct SBA resources to underserved entrepreneurs that still struggle to access affordable capital.
“Making the Community Advantage program permanent has been a long time goal of CDFI small business lenders,” observed Lisa Mensah, Opportunity Finance Network (OFN) president and CEO. “The direct lending program proposed by the House is historic in its focus on loans of $150,000 or less. Directing SBA resources to smaller borrowers means that precious government resources are more likely to reach minority, women-owned and very small businesses, as OFN has long recommended.”
Congress and the Biden-Harris Administration are negotiating the size and specific components of the Build Back Better plan. OFN has urged the inclusion of the Small Business Committee’s recommendations as well as other provisions that utilize the unique capabilities of the CDFI industry to reach historically disinvested people and places. “A successful economic recovery must be an inclusive one,” added Mensah.