The Biden administration will award $1.25 billion to hundreds of community lenders in an effort to speed the economic recovery from the coronavirus pandemic, Vice President Kamala Harris will announce on Tuesday.
More than 860 community development financial institutions, which lend to small businesses and people in disadvantaged communities that have trouble getting loans from big banks, will receive the funding, according to a senior administration official. Harris is to make the announcement during a event with Treasury Secretary Janet Yellen at the White House complex.
Harris, the first Black and Asian-American vice president, has emphasized the need to help small, minority-owned businesses that have suffered disproportionately during the coronavirus pandemic.
The funding comes at a pivotal time in the economic recovery. Businesses have begun to reopen to full capacity across the country as virus cases plummet, but many have struggled to hire new workers. The National Federation of Independent Businesses’ Small Business Optimism Index fell 0.2 to 99.6 in May after increasing each previous month this year.
Harris plans to discuss her view that providing greater access to capital to small businesses in underserved communities will help them stand on better footing to survive in the long term, said the official, who requested anonymity to preview the announcement.
The lenders that will receive the funding are in 48 states and serve urban, rural, suburban, Black, Native American and other minority communities, according to the official. There was an open application process to obtain the funds and the bulk of the percipients will receive about $1.8 million apiece.
Funding for the lending program comes from $12 billion allotted for community lenders in the stimulus law signed in December by former President Donald Trump. Harris, when she was still in the Senate, worked to include the provision in the law alongside Senator Mark Warner, a Virginia Democrat, and House Financial Services Committee Chairwoman Maxine Waters, a California Democrat.
Both lawmakers are to attend Tuesday’s event.
Also included in the funding package is $9 billion for the Emergency Capital Investment Program to benefit community development financial institutions and minority depository institutions, and around $1.75 billion for minority lenders. That money has yet to be disbursed, as the application process is open.
The announcement comes days after the vice president returned from a trip to Guatemala and Mexico, where she earned mixed reviews in her first overseas trip dealing with another part of her portfolio: addressing the root causes of Central American migration to the U.S.
