Ceniarth LLC, a private foundation focused on funding market-based solutions benefiting underserved communities, has committed an initial $3 million in zero-interest loans to Rural Community Assistance Corporation (RCAC) to bolster its ability to continue to lend under the Paycheck Protection Program (PPP).

Ceniarth is an impact investment group that supports rural communities in the United States and internationally. Ceniarth focuses on persistent poverty regions through funding nonprofits, for profits and hybrid organizations.

PPP’s first $349 billion allocation ran out, but a second allocation passed recently. Private impact investors like Ceniarth are stepping in to help support Community Development Financial Institutions (CDFIs) in the interim.

Unlike depository banks, CDFI’s cannot tap Treasury Department facilities to borrow cheaply against their PPP loans. As a result, they face unique liquidity restraints. Under the PPP, lenders make loans guaranteed by the Small Business Administration that are forgivable if businesses maintain their payroll and avoid layoffs. Lenders are reimbursed in two to three months if the business qualifies for forgiveness. RCAC made over $850,000 in PPP loans ranging from $40,000 to $260,000 in the week before the government program ran out of funds.

The full story is at Impact Alpha, here: https://impactalpha.com/with-zero-interest-loans-and-deposits-wealthy-families-rush-capital-to-rural-lenders-and-impoverished-communities/