Small businesses (companies with fewer than 500 employees) employ about 60 million Americans, or almost half of all private sector workers. They are also essential engines of job growth, accounting for almost two-thirds of all new jobs created in the U.S.footnote1.
Supporting small businesses through community development financial institutions
Small businesses have been particularly hard hit by the coronavirus pandemic sweeping the country, and keeping them afloat throughout the crisis is critical to the nation’s future.
Recognizing the need, the $2 trillion CARES Act that Congress passed into law includes a number of provisions to provide immediate relief to small business owners, including loans that may be partially or fully forgiven and are 100% federally guaranteed.
As part of its efforts to help communities affected by the pandemic, Bank of America has committed up to $250 million in capital to community development financial institutions, or CDFIs, and up to $10 million in philanthropic grants to help fund CDFI operations. The $10 million in philanthropic dollars dedicated to CDFIs is part of our earlier announcement to support our local communities.
CDFIs are local financial institutions with a mission of serving low- and moderate-income communities. The new capital and grants that Bank of America is providing will go to CDFI loan funds and CDFI- and minority-owned banks, which, in turn, will use the funds to expand access to capital for small businesses in need of financial assistance during this humanitarian crisis.
Bank of America is the largest investor in CDFIs in the United States, with more than $1.6 billion in loans and investments in over 250 CDFIs.
The company is working with individual CDFIs to provide modifications and payment deferrals for those facing liquidity challenges. This will help to ensure that CDFIs continue to have the capital and ability to support small businesses and not-for-profits in the future.
On March 17, Bank of America committed $100 million to support communities around the world impacted by the coronavirus. The money will help not-for-profits increase medical response capacity, address food insecurity, increase access to learning as a result of school closures through a grant to Khan Academy, and provide support to the world’s most vulnerable populations.
Visit the Bank of America Resource Center to learn more about how we are supporting our customers, employees and local communities through these challenging times.
Originally published 4/14/2020