Federal Funding to Provide Loans to Small and Disadvantaged Businesses

If your small business needs financial assistance after operating—or not operating—through the pandemic, you may be eligible for a loan from a community lender. Last week, the Biden Administration announced it will be distributing US$1.25 billion to community lenders across the country to help boost the economic recovery, The Associated Press (AP) reports.

The $1.25 billion funding will come from the $12 billion  stimulus package signed into law in 2020  by then-President Donald Trump. The money will allow small businesses and disadvantaged business owners who are usually turned away from large banks to receive loans from more than 860 community development financial institutions (CDFIs).

U.S. Vice President Kamala Harris announced the funding at a White House event. “President Joe Biden and I knew that more than repair, we must re-imagine our economy,” Harris said. “Small businesses, of course, are at the center of this re-imagining.”

Janet Yellen, U.S. secretary of the treasury, said CDFIs are “exactly the right place to focus our attention, because these questions — who can access credit and capital and who can’t —are at the root of many long-term structural problems in our economy.”