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As Congress deliberates the next round of COVID-19 aid, many businesses are still grappling with the shock and struggles they faced when they first sought help through the Paycheck Protection Program (PPP). In many cases, funds dried up before those in need were able to access them. Why? PPP, in many cases, was a timely example of the challenges women- and minority-owned business have long known: Our economic system is unjust, and access to capital is not equal.

Access to capital — one of the most proven ingredients for economic strength — is disproportionately unequal for small businesses owned by women, people of color and new proprietors.

Minority-owned businesses are less likely to receive loans than nonminority firms. On average, minority-owned businesses are two to three times more likely to be denied loans. Why? Borrowers are viewed as too poor and too disconnected from the financial system to qualify for conventional bank loans. When funds are received, loan amounts are less than half the value of those received by white-owned businesses, often carrying higher interest rates.

COVID-19 is a revealing microcosm of these systemic inequities. While data showing who received funds based on race and other demographics is limited, some estimate that upward of 90% of minority-owned businesses were destined to be shut out of PPP loans because of the program’s application process and lending standards. Surveys have shown only 12% of Black and Hispanic business owners who applied for the forgivable low-interest loan under the federal initiative received it.

As small businesses embark on long recoveries, the community development ecosystem will play a critical role in expanding access to capital for the small business owners who need it most. For more than 26 years, Community Development Financial Institutions (CDFIs), including Community Reinvestment Fund, USA (CRF), have expanded opportunity, created good-paying jobs, and helped build individual wealth by directing capital into historically underserved communities and businesses.

Since the inception of CDFIs, they have made loans that helped start more than 400,000 small businesses around the country with capital totaling more than $74 billion. Approximately 58% of CDFI borrowers are minorities.

The national network of CDFIs is strong and has grown central to a healthy community development ecosystem. The distribution of more than $7.5 billion in PPP loans is an example of CDFIs’ growing potential. Throughout the country, CDFIs were essential in helping thousands of small businesses and nonprofits access PPP loans when larger banks could not.

To serve more small businesses and to have a bigger impact on underserved communities, CDFIs are forging new offerings and partnering with public, private, and nonprofit institutions.

• Large banking institutions are partnering with CDFIs for referral relationships to help small businesses that don’t meet their criteria access the credit they need. Here in Minnesota, U.S. Bank and CRF formed a marketplace to match borrowers who might not qualify for traditional credit products with alternatives through a CDFI, while still maintaining a U.S. Bank relationship.

• Government funding can be cumbersome to obtain, but CRF works with CDFIs to forge relationships and create tools to help the process be more accessible. For example, in navigating small business loan applications, CRF works with several fellow CDFIs and community partners — including Latino Economic Development Center, African Economic Development Solutions, Metropolitan Economic Development Association and Neighborhood Development Center — to distribute loans through a “hub and spoke” model.

• City officials have turned to CDFIs for counsel in distributing funds raised for rebuilding following unrest in Minneapolis and other cities nationwide, finding their unique blend of financial and community development expertise invaluable.

What COVID-19 has proved is that the current financial model supporting small businesses is not fair or just. In order to improve economic outcomes for historically underserved communities, there must be a deepened collaboration between large financial institutions, CDFIs and the small-business owners they serve. This is an important first step toward removing barriers to access, streamlining the funding process and expanding opportunities for good-paying jobs for the people and communities that need them most.

Frank Altman is co-founder and CEO of Community Reinvestment Fund, USA, based in Minneapolis.