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Fed Urged to Back Small Business Loans by Nonprofit Lenders

April 29, 2020, 5:05 PM

Nonprofit community lenders should have access to a Federal Reserve liquidity facility that backs emergency loans to small businesses impacted by the economic fallout of Covid-19, Senate Democrats said.

The central bank’s financial backing is needed to help minority- and women-owned businesses, and other businesses in low-income areas access the Small Business Administration’s Paycheck Protection Program (PPP) loans, Sen. Sherrod Brown (D-Ohio) and seven other senators said in a letter to the Fed released today.

Non-profit community development financial institutions (CDFIs) lack the same liquidity as banks to help them continue issuing the loans as they churn through their capital, ...