Trump Administration Vows More Relief for Low-Income Communities
Trump Administration Vows More Relief for Low-Income Communities
(Bloomberg) -- Trump administration officials said they’re ensuring that at least $10 billion from a coronavirus relief program for small businesses is loaned by private institutions that serve low-income communities with scant access to traditional banks.
About $3 billion in the second round of funding for the Paycheck Protection Program has already been processed by community development financial institutions through May 23, and about $7 billion more is being set aside so that relief reaches under-served places that are in need, according to the Small Business Business Administration and Treasury Department, which run the program.
There have been complaints from members of Congress and others that the PPP, which allows loans of as much as $10 million that can become grants to help small businesses keep workers employed, hasn’t been reaching minority-owned firms and businesses that lack an established relationship with a lender.
An SBA inspector general’s report on May 8 criticized the agency for failing to take steps to make a priority of borrowers in under-served and rural markets.
The SBA has been seeking out disadvantaged business owners who had trouble getting help from banks and urging them to contact a CDFI, an administration official said on condition of anonymity.
Other small businesses have been reluctant to apply because there’s too much paperwork, but the application is just two pages, and lenders can help them complete it, the official said.
The SBA also has partnerships with Small Business Development Centers and other organizations and non-profits that can provide technical assistance to help firms access PPP funding, the official said.
The second round of $320 billion in PPP financing began on April 27 after an initial tranche of $349 billion was exhausted in just 13 days. The SBA reported on its website that more than 4.4 million loans worth $510.5 billion had been approved as of Wednesday, meaning about $130 billion remains, according to a second administration official.
Through May 23, more than 300 CDFIs had handled almost 95,000 loans worth almost $7.2 billion, according to an SBA report. Congress also set aside $60 billion for smaller lenders in the second round of PPP funding, including $30 billion for CDFIs and small banks and credit unions with less than $10 billion in assets.
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