Community First Fund doubles PPP loans to mom-and-pops

Initially, Community First Fund was expecting to approve $10 million in Paycheck Protection Program loans to help small businesses stay afloat during the COVID-19 pandemic, said President and CEO Daniel Betancourt.

But the lender – a community development financial institution, or CDFI, headquartered in Lancaster – quickly realized the demand would be enormous. The fund targets historically underserved populations, such as minority and women business owners, and serves 15 counties in southcentral and southeastern Pennsylvania. Betancourt calls Community First Fund “a mission-based bank.”

So the $10 million target became $20 million – and the capital to cover that has already been raised, he said.

President and CEO Daniel Betancourt of Community First Fund PHOTO/SUBMITTED

The money “came just in time for us to replenish our reserves,” Betancourt said.

Community First Fund received low-interest (less than 1%) loans from three sources:
• $5 million from U.S. Bancorp Community Development Corp., the tax credit and community investment subsidiary of U.S. Bank. The fund was among seven CDFIs chosen nationwide.
• $10 million from PNC Financial Services Group. Community First was among eight CDFIs to receive PPP support loans.
• $5 million from the Federal Reserve’s PPP Liquidity Facility.

For the Fed to lend to community development financial institutions is “unprecedented,” Betancourt said.

And the PNC money, he added, was approved within days.

In a press release, Zack Boyers, CEO of for U.S. Bancorp Community Development Corp., said: “CDFIs are committed to supporting entrepreneurs and small businesses in low-income and underserved communities and that means collectively, these CDFIs will help keep paychecks flowing to employees who may need it the most.”

Many of Community First Fund’s clients are “mom and pop” establishments, with less than a quarter of a million dollars in annual sales, Betancourt said. They include barber shops. Salons. Auto mechanics. Restaurants.

The lender disbursed 500 loans out of that $20 million, which comes to an average of $40,000 per loan. The average for African American and Hispanic entrepreneurs was $15,000, he said.

Ninety-five percent of PPP applicants were approved, and the loans were issued within 10 business days, Betancourt said.

Susan Louie, owner of Citronnelle at 110 W. Orange St. in Lancaster — a French restaurant “with a global twist,” as she described it — received $12,400. For the past two months, with the eatery closed, that loan’s been her only source of income, Louie said. The establishment’s seven or so employees including Louie and her husband, Rafael Perez, the chef.

Citronnelle, in business seven years, plans to start offering takeout service next month, and patio dining when it reopens, she said.

The owner of M.A.K. by Judy hair salon, Judy Henriquez, was approved for a loan of more than $5,000. Her business at 402 W. Orange St. in Lancaster has been shuttered since mid-March, she said; the salon employs two stylists in addition to Henriquez.

A couple of friends recommended she apply with Community First Fund. The money has been a big short-term help, she said.

The PPP is part of the CARES Act, an economic stimulus signed into law last month. At least 75 percent of the loan money must be used for payroll, Betancourt said. “They have eight weeks to document they’re doing that.”

If Community First Fund verifies it, the loan is forgiven, he said.

Tyrik Jackson is a repeat client. The owner of Sharper Image Barber Shop at 361 E. Chestnut St. in Lancaster and Premier Barber Institute in Norristown, he received three prior loans from the lender before being approved for $6,400 through PPP. Community First Fund “is an incredible resource,” he said.

The fund also invests in “catalytic” community revitalization projects, Betancourt said. One of those was the Holiday Inn Lancaster, the former Brunswick.

The Holiday Inn received a PPP loan of about $450,000. Sam Wilsker, co-developer of the hotel with John Meeder, said the money helped with payroll for their 75 employees and allowed them to bring back the chef and others who work in The Imperial restaurant, which now offers takeout service.

“We’re doing what we can to hang on,” Wilsker said.

The hotel has some guests, including health care workers, and college students who can’t go home because of the pandemic, he said.

Turning the Brunswick, which was about to be condemned seven years ago, into a high-quality hotel was very challenging, Wilsker said.

It was “a labor of love – and pain” even before the COVID-19 pandemic, he added, and Community First Fund was a major reason it came to fruition.