A View of PPP from the Inside: Financing, Financial Performance, and Operations of CDFI Paycheck Protection Program Lenders
Opportunity Finance Network
First published December 2023
Through the Paycheck Protection Program (PPP), banks and financial institutions distributed nearly $800 billion in forgivable loans to businesses to help them and their employees weather the pandemic. A large and growing body of research has emerged to examine the program’s implementation, effectiveness, and impact. There is also a unique opportunity to examine how PPP affected the boots-on-the-ground lenders that deployed loans — especially smaller, mission-driven lenders, such as community development financial institutions (CDFIs).
This brief examines the financing activity, financial performance, and efficiency and operations of Opportunity Finance Network’s member CDFIs that served as PPP lenders. These members devoted a substantial portion of their fiscal year 2021 lending activity to PPP, had higher self-sufficiency and change in net assets than non-PPP lenders, and achieved high rates of operational efficiency. In the short term, PPP provided an essential economic lifeline to businesses and communities. It may have also enhanced the enduring ability of CDFIs to advance mission impact.