Financial First Response
Financial First Responders and Recovery Partners
From the very beginning of the COVID-19 pandemic, CDFIs worked to offset the looming economic threat to low-income communities. Many CDFIs proactively reached out to their borrowers with accommodations to help ease economic disruption. Offering principal and interest payment deferrals, emergency loans, loan modifications, and other emergency responses or new products, CDFIs helped clients survive and begin to recover from the crisis.
CDFIs were quick to act because our industry has deep experience leaning in during times of crisis. In the aftermath of natural disasters, 9/11, the 2008 economic downturn, and more, CDFIs were financial first responders helping individuals, businesses, and communities.
We can weather times of economic uncertainty through a combination of strong balance sheet management, deep ties with our local communities, and public and private sector partnerships.
COVID-19 Small Business Response and Recovery
CDFIs partner with the public and private sector to help capital flow to the hardest to reach communities. CDFIs act as financial first responders in crisis, offering relief measures to small business borrowers impacted by external shocks.
During the pandemic, the federal government turned to CDFIs as Paycheck Protection Program (PPP) lenders when it realized larger banks were not reaching minority- and women-owned, very small, and other financially underserved businesses with PPP loans. CDFIs outperformed these larger lenders.
In December 2020, the Federal CARES Act included $12 billion in funding for CDFIs and Minority Depository Institutions.
Private and Philanthropic Partners
Corporations and philanthropies understand that visionary investing in justice and equity takes patient debt capital and grant support.
Many, like Twitter, Google, and numerous leading banks and philanthropies, have invested long term money in CDFIs to help the hardest hit communities survive COVID-19’s economic impact and drive an inclusive recovery.