According to data from the small business administration, more than $2.5 billion in funding from the paycheck protection program has reached more than 29,000 Idaho businesses. About $11 million of that has reached the smallest businesses in under-served communities through loans made by Community Development Financial Institutions, better known as CDFIs.
"That indicates that the lending institution [gives] at least 60% of its capital to underserved populations," says Dave Glaser. He's president of MoFi, a CDFI based in Montana which also serves Idaho, Wyoming and rural Washington and Oregon states. They were previously known as the Montana and Idaho Community Development Corporation.
Community Development Financial Institutions are typically non-profits and receive some federal dollars from the U.S. Treasury CDFI Fund to initiate loans. Many focus on developing affordable housing and community improvement through large projects like community centers and common-use buildings. Many also work with individual borrowers to lend funds for business growth in places underserved by larger banks and credit unions.
May 28, the U.S. Small Business Administration announced $10 billion in funds from round two of the Paycheck Protection Program would be earmarked just for CDFIs to lend. That was part of the response to criticism during round one that a disproportionate amount of loans went to large and medium-sized businesses through large banks and didn't reach many small businesses the program was designed to help.
The $10 billion for CDFIs was part of $30 billion the SBA set aside solely for small community lenders and minority lending institutions.
According to the opportunity finance network, there are just two CDFI lenders based in Idaho. Neither qualified to lend PPP funds, leaving MoFi to generate the bulk of Paycheck Protection Program loans in Idaho. As of last week, the non-profit said it had loaned out more than $11 million across 400 loans through the program.
“Our average loan size is $27,000 in Idaho which is considerably smaller than the national average," Glaser said. "We’re helping lots of sole proprietors and lots of very small businesses.”
One of those businesses is Meadows Assisted Living Center in Salmon, Idaho. It has 16 beds and nine staff.
The PPP loan Meadows received helped cover a steep increase in food costs plus more protective equipment, said administrator Michelle Bingham. She added that PPP funds used for salaries mean her employees aren’t at risk of being laid off. One less thing to worry about when there's more than enough worry to go around.
"If [staff] actually contracted it, would they be able to take the time that they need to get better and come back to work without losing everything that they have?" Bingham said. "If they’re focusing on that fear, then they’re not able to focus as much on the resident.”
Salmon is the seat of Lemhi County. As of Thursday, there have been two confirmed cases of COVID-19 in the county.
Bingham said one resident who had traveled to Idaho Falls didn't return to the facility in Salmon right away as a precaution, but they haven't had any residents move out during the pandemic.
Not every CDFI lender can distribute PPP loans. Many Native American and minority-focused CDFIs didn’t meet the SBA’s requirements. To participate, lenders need to be registered as 7(a) lending organizations and show a minimum of $50 million in annual loans. April 30, The Treasury Department lowered that threshold to $10 million in annual loans. Jonelle Yearout of the NiMiiPuu Fund, a Native CDFI in Lapwai, Idaho, said even at the lower number, very few native CDFIs across the country meet that threshold. She’s been referring borrowers to MoFi.
Under current legislation, the PPP runs through June 30th. Of the combined $659 billion in two rounds of funding, more than $125 billion remains available, including 70% of the $10 billion set aside for CDFI lenders. MoFi's Glaser is eager to continue to get the word out.
“It’s just really important for them to know that this is out there for them. We have [less than] a month to find all those businesses and make sure they get this capital if they need it."
An earlier version of this story identified the total loans from CDFI lenders as $400 million. The correct number is $11 million in loans to 400 businesses. We regret the error.
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