SPONSORED:

Trump administration designates $10B of PPP funds for community lenders

Trump administration designates $10B of PPP funds for community lenders
© Getty Images

The Small Business Administration (SBA) and Treasury Department announced Thursday that $10 billion of “round two” funding for the Paycheck Protection Program (PPP) is being set aside for financial institutions focused on lending to low-income communities.

The announcement of dedicated funds to be lent to small businesses by community development financial institutions (CDFIs) comes after lawmakers urged the Trump administration to make such a set-aside.

The set-aside includes $3.2 billion in PPP loans that CDFIs have already approved from the second round of funds that Congress provided to the program in April. Treasury and the SBA said that designating an additional $6.8 billion for CDFIs will help ensure that small businesses in all communities get the capital they need to retain their workers.

ADVERTISEMENT

“The forgivable loan program, PPP, is dedicated to providing emergency capital to sustain our nation’s small businesses, the drivers of our economy, and retain their employees,” SBA Administrator Jovita Carranza said in a news release. “CDFIs provide critically important capital and technical assistance to small businesses from rural, minority and other underserved communities, especially during this economically challenging time.”

Treasury Secretary Steven MnuchinSteven Terner MnuchinDemocrats call Trump's COVID-19 response 'among the worst failures of leadership in American history' The Hill's Morning Report - Presented by Facebook - Trump, Biden set for weekend swing state sprint Mnuchin says he learned of Pelosi's letter to him about stimulus talks 'in the press' MORE said that the administration has “received bipartisan support for dedicating these funds for CDFIs to ensure that traditionally underserved communities have every opportunity to emerge from the pandemic stronger than before.”

Under the PPP, small businesses can receive loans that are forgiven if they use most of the funds to maintain payrolls. 

Congress provided an initial $349 billion for the program in legislation that President TrumpDonald John TrumpStephen Miller: Trump to further crackdown on illegal immigration if he wins US records 97,000 new COVID-19 cases, shattering daily record Biden leads Trump by 8 points nationally: poll MORE signed in late March. After that money was exhausted, Congress passed legislation in April that provided a second round of $310 billion for the program.

In total, CDFIs have approved more than $7 billion in PPP loans as of May 23, Treasury and the SBA said.

ADVERTISEMENT

A group of key congressional Democrats, including House Speaker Nancy PelosiNancy PelosiOn The Money: McConnell says Congress will take up stimulus package at start of 2021 | Lawmakers see better prospects for COVID deal after election Overnight Health Care: House Dem report blasts Trump coronavirus response | Regeneron halts trial of antibody drug in sickest hospitalized patients | McConnell says Congress will take up stimulus package at start of 2021 McConnell says Congress will take up stimulus package at start of 2021 MORE (D-Calif.) and Senate Minority Leader Charles SchumerChuck SchumerReestablishing American prosperity by investing in the 'Badger Belt' House Democrats introduce bill to invest 0 billion in STEM research and education Graham dismisses criticism from Fox Business's Lou Dobbs MORE (D-N.Y.), wrote a letter to Mnuchin and Carranza in April asking that at least $10 billion be set aside for CDFIs and minority depository institutions. 

Lawmakers on Thursday praised the announcement of the set-aside for CDFIs.

“I want to thank Secretary Mnuchin for heeding our calls to set aside a pool of funding specifically designated for lending by CDFIs, and now we’re urging him to move on and include Minority Depository Institutions as well since they, too, are critical to expanding access to communities of color,” Schumer said in a statement.

Senate Small Business and Entrepreneurship Committee Chairman Marco RubioMarco Antonio RubioWisconsin GOP says hackers stole .3M Hillicon Valley: Big Tech hearing the most partisan yet | Rubio warns about foreign election interference | Trump campaign site briefly hacked Rubio warns that election interference may ramp up around Election Day MORE (R-Fla.) said in a tweet that “CDFIs play a critical role in providing under-served communities access to #PPPloans” and that he is “glad the administration continues to support these critical institutions.”