Goldman Sachs has upped the ante by another $250 million in the amount of capital it is providing for a federal loan program aimed at small businesses, Reuters reported.
The Wall Street icon, which is in the midst of a strategic push into consumer banking, said Monday (June 15) it would pump an additional $250 million into the Paycheck Protection Program, better known as PPP, being administered by the U.S. Small Business Administration (SBA).
Goldman said the new money comes atop a previous $500 million commitment to the PPP, pushing the total to $750 million. The federal PPP initiative provides low-cost financing for businesses to retain staff as the coronavirus-driven downturn takes a toll, with the potential for the loans to be completely forgiven — and effectively converted into grants — if businesses meet payroll and hiring commitments.
Goldman is funneling the money through the SBA to CDFIs, or community development financial institutions, and other “mission-driven” lenders, which can then make the loans available to small and medium-sized businesses (SMBs).
In addition, Goldman announced it has inked agreements with both the National Urban League and the U.S. Hispanic Chamber of Commerce. The aim of the partnerships is to get the word out to minority-owned businesses about the loan program.
“We have seen the SBA’s program make real difference to small business owners, but it is not reaching them equally,” said David M. Solomon, chairman and CEO of Goldman Sachs, in a press release. “It is clear Black- and Latinx-owned businesses have seen more significant damage, and that CDFIs and similar institutions can help address this problem and direct capital to these businesses most in need.”
Leaders of the National Urban League and the U.S. Hispanic Chamber of Commerce said the loan money is desperately needed, with minority businesses facing an uneven playing field when it comes to access to capital in even the best of times.
“The pandemic has intensified the historic economic racial barriers to economic opportunity,” National Urban League President and CEO Marc H. Morial said in a press release. “Even in the best of times, Black-owned businesses have a harder time securing loans.”