Northern Trust Corporation has announced it is providing $100 million in low-cost funding to assist Community Development Financial Institutions (CDFIs) as they provide loans to small businesses and non-profit organizations under the federal Paycheck Protection Program (PPP).
“This funding in response to the COVID-19 pandemic will help meet urgent demand among small businesses and non-profit groups,” Chairman and Chief Executive Officer Michael O’Grady said. “Since 1995, we have provided capital to CDFIs with flexible terms and low rates to facilitate lending in underserved communities.”
Under the CARES Act, the PPP facilitates bank loans to small businesses guaranteed by the Small Business Administration to help cover payroll and other expenses during the COVID-19 pandemic. CDFIs provide loans, investments, financial services and technical assistance to underserved populations and communities.
“These investments facilitate the rapid deployment of PPP loans to small businesses and non-profit organizations by providing low cost capital to bridge the timing between the making of loans and reimbursement by the Small Business Administration,” said Connie Lindsey, Head of Corporate Social Responsibility and Global Diversity, Equity & Inclusion. “In turn, the funds will assist the small businesses that form an integral part of our communities.”
Northern Trust’s partners in these investments include:
- Self-Help Fund ($50 million) — a national CDFI with community development credit union branches in Illinois, California, Florida, North Carolina and South Carolina. Self-Help has assisted more than 1,100 PPP borrowers with a median loan size of $35,000. Illinois legacy Second Federal and Seaway branches are part of the Self-Help network of credit unions.
- National Development Council (NDC) CDFI Subsidiary Grow America Fund (GAF) ($25 million) — a national SBA lender.
- immito ($10 million) — the SBA subsidiary of Local Initiatives Support Corporation, a national social enterprise.
Other recipients include:
- Access to Capital for Entrepreneurs: provides SBA lending in in Atlanta and Northern Georgia.
- Black Business Investment Fund: provides SBA lending in the state of Florida.
- PeopleFund: provides SBA lending in Texas.
- Virginia Community Capital: provides SBA lending in Virginia.
- Wisconsin Women’s Business Initiative Corporation: provides SBA lending in Wisconsin.
For those small businesses that are not able to access PPP loans, Northern Trust is investing in CDFIs that provide small business loans through state COVID19 small business loan pools, such as the Illinois Small Business Emergency Fund and the San Francisco Hardship Emergency Loan Program.
This investment is aligned with Northern Trust donating $3 million to support organizations serving those directly affected by the pandemic.