Jennifer A. Vasiloff
As of May 5, the only lenders still authorized to process Paycheck Protection Program (PPP) applications until the May 31 deadline are CDFIs, Minority Depository Institutions (MDIs), Small Business Administration (SBA) microlenders and Certified Development Corporations. These four types of mission lenders — termed Community Financial Institutions (CFIs) — have outperformed all other PPP lenders in multiple ways. The law establishing the $292 billion 2021 Paycheck Protection Program reserved $15 billion for CFIs to lend. As of May 23, SBA data shows that CFIs had lent TWICE this amount.
In addition, CFIs are reaching financially underserved businesses with a higher proportion of their loans compared to every other type of PPP lender. The SBA reports that 77.9 percent of CFI loans are under $150,000 (49.8 percent program average); 39.7 percent of CFI loans are in low- and moderate-income areas (28 percent program average); and 15.7 percent are in rural areas (16.6 percent program average).
Throughout the pandemic, the country has seen what CDFIs can deliver — our passion for reaching businesses and communities in need is shining through. It is complicated to land a $284 billion program in a few months, but CDFIs have punched above our weight and will continue to do so.
“Our industry is committed to serving PPP borrowers up to the very last minute,” observed OFN President and CEO Lisa Mensah. “I am so proud of CDFI small business lenders and the herculean efforts they continue to make to assist very small and marginalized small business borrowers.”