Bank of America has loaned $26 billion to pandemic-struck businesses through the Paycheck Protection Program. But some of its most valuable PPP loans were the ones it made through community development financial institutions (CDFIs). CDFIs are nonprofits that combine philanthropic money and private capital to support small businesses whose cash flow or credit histories scare off traditional lenders. This spring, an infusion of more than $250 million in additional credit from BofA, along with $10 million in grants, helped its partner CDFIs keep the doors open at a childcare center in Georgia and a housing and job-training service in Philadelphia, among many other operations. (Pictured at right are two owners of small businesses that partnered with the Community Loan Fund of Chicago, one of BofA's CDFI allies.)
BofA has been building ties with CDFIs for 25 years: It now has a $1.6 billion credit portfolio with 255 CDFI partners across the U.S. It has also stepped up to support minority-owned banks, which often work closely with CDFIs. In early September, BofA announced it would make $50 million in equity investments in so-called minority depository institutions—capital to help them close the racial wealth gap.
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