While the second Paycheck Protection Program (PPP) bill approved by Congress replenished the $321 billion small business rescue fund, it should have gone further to support small and minority-owned businesses. This government-funded program can be accessed only through larger banks and other existing Small Business Administration (SBA) lenders. Many business owners of color do not have these relationships due to disparities in lending in the financial services sector. Also, banks are lending to businesses receiving larger loans with payrolls larger than most businesses of color. As a result, roughly 95 percent of Black-owned businesses stand close to no chance of receiving a PPP loan through a mainstream bank or credit union.¹ The federal government must require fair access through banks and credit unions to businesses of color. To do this, PPP funds should be directed through Community Development Financial Institutions (CDFIs) as eligible lenders. Without access, the 1,000 CDFIs operating nationwide will not have the liquidity needed to continue making PPP loans to economically disadvantaged communities, including very small businesses, non-profits, businesses operating in low-wealth markets or in rural communities, minority and women-owned businesses. These businesses are vital but often underserved by larger financial institutions, despite established fair lending regulations. Unless the Treasury Department changes its existing lender approval requirements, the SBA will continue to overlook small and minority-owned businesses for bigger companies — that are not in fact small businesses — that will once again dominate the program leaving it nearly impossible for a significant number of qualified CDFI small business lenders to gain access to the program. CDFIs make PPP loans ranging in size from $2,000 to $30,000 while the SBA’s average loans in the first round of funding was $206,000.² Nearly 30 million businesses in the United States are small or one-person operations. Economically, they account for 99.7 percent of all employer firms, 64 percent of new employer jobs and 46 percent of private-sector output. Congress should approve a supplemental appropriation to $1 billion allowing CDFIs across the country to leverage $12 billion in capital.³ The SBA should provide low-documentation SBA grants for small businesses with demonstrated impact.⁴

_{End Notes
1.}
https://www.responsiblelending.org/
_2.
https://ofn.org/articles/paycheck-protection-program-agreement-reached-additional-funds
_3.
https://thehill.com/blogs/congress-blog/politics/488825-ensure-small-business-survival-during-covid-19-crisis-fund-the
_4.
https://www.enterprisecommunity.org/blog/03/20/congress-must-include-affordable-housing-community-development-measures-in-covid-19-response-legislation