The U.S. Department from the Treasury today awarded $1.25 billion in COVID-19 relief funds to 863 community development financial institutions (CDFIs). The awards were announced today by Vice President Kamala Harris in the White House with Treasury Secretary Janet L. Yellen. The grants is going to be made through Treasury's CDFI Rapid Response Program (CDFI RRP) and will provide necessary capital for CDFIs to reply to economic challenges created by the COVID-19 pandemic, particularly in underserved communities.
Pacific Community Ventures received the utmost $1.8 million, which we’ll purchase our work delivering reparative capital to economically distressed communities, and communities of color hit hardest by COVID. This builds on our operate in 2022. When COVID hit, interest in our capital grew almost 10,000%. We received 1,945 loan inquiries totaling $172 million. Even though many investors pulled back and stopped lending entirely in 2022, PCV kept our lending open the whole time, and rapidly responded to our clients by refinancing their loans, providing payment deferments and interest-only payment periods, and helping them plan in advance for longer shutdowns and necessary business pivots.
PCV has also gone big in our response by co-founding the $150 million California Rebuilding Fund, which leverages private money with state guarantees to fuel the recovery. And we've worked with the California IBank for a faster auto-approval process that guarantees 95% of every loan we make under $100K, the range we see most requested by our community. We've also partnered using the state of California and Lendistry on administering the $2.5 billion California Relief Fund grant program, and with Wurwand Foundation on their FOUND/LA Small Business Recovery Fund.
In 2022, PCV funded $4.8M in loans (averaging $70K), with 81% of capital committed to businesses located in, or hiring from, economically distressed communities in California, and 41% of capital invested in businesses based in majority-BIPOC communities in California. 84% of capital deployed went to women or entrepreneurs of color, and PCV's lending clients each averaged 31% job development in 2022.
“In serving places that the financial sector historically hasn't served well, CDFIs lift our whole economy up. We know that for every dollar injected into a CDFI, it catalyzes eight more dollars in private-sector investment, and therefore today's announcement might lead to an additional $10 billion in investment,” said Secretary Janet Yellen. “The President and also the V . p . ran on a very ambitious agenda – 'Build Back Better,' unwinding systemic racism, creating an economy that actually works for everybody. In my opinion this is what that appears like in practice. By channeling more capital into CDFIs, we are translating those ideals into reality.”
The CDFI RRP grant funds is going to be accustomed to support eligible activities for example financial products, financial services, development services, and certain operational activities, and to enable CDFIs to construct capital reserves and loan-loss reserves. The CDFI Fund designed the program to disburse the funds rapidly in light of the nationwide economic impacts of the COVID-19 pandemic. The CDFI RRP was licensed by the Consolidated Appropriations Act, 2022 (Pub. L. 116-260).
“These awards provide CDFIs by having an unprecedented degree of flexible capital to assist distressed and underserved communities across the country take meaningful steps towards dealing with the debilitating economic impacts from the COVID-19 pandemic,” said CDFI Fund Director Jodie Harris. “CDFI RRP awards will enable CDFIs to assist businesses keep their doors open, help families pay the bills, and maintain important community facilities in this difficult time.”
