Community Development Financial Institutions, or CDFIs, are utilizing all resources at their disposal to help small businesses stay afloat as the novel coronavirus spreads throughout the U.S.

With an influx of donations from large banks like JPMorgan Chase & Co., Wells Fargo & Co. and Bank of America Corp., CDFIs are offering relief to current borrowers and looking to help new potential borrowers impacted by the novel coronavirus. CDFIs provide financial services to underserved communities, such as minority, immigrant and low-income populations.

"Stimulus dollars don't normally make their way down to minority-owned businesses," Luz Urrutia, CEO of Opportunity Fund, said. "Sometimes CDFIs are the best conduit to get that funding to those communities."

CDFIs serve customers typically overlooked by mainstream financial institutions, Urrutia said. Opportunity Fund is a nonprofit organization that provides financing for small businesses. About 89% of the organization's borrowers are minority business owners, according to Urrutia.

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Under normal circumstances, Opportunity Fund receives between 300 and 400 calls per day. Since COVID-19 began weighing on the U.S. economy, the organization receives more than 1,000 calls per day from both existing and new borrowers.

Opportunity Fund recently launched a small business relief fund, aimed at raising $50 million for small businesses impacted by COVID-19. The nonprofit has raised $7 million for the fund in the last month, roughly equal to the amount raised in the previous nine months combined.

Wells Fargo's $1 million contribution was the first donation to the relief fund, followed by contributions from JPMorgan and Nasdaq Inc.

"[CDFIs] are a critical part of our small business growth strategy, and they are even more important right now during the COVID-19 response because they can reach vulnerable small businesses that may not survive extended closures," Jenny Flores, head of small business philanthropy at the Wells Fargo Foundation, wrote in an email.

During the pandemic, Wells Fargo is "working to accelerate funds to CDFIs" in order to reach entrepreneurs who need a lifeline, Flores wrote.

On March 31, Bank of America announced $10 million in philanthropic grants to CDFIs and committed up to $250 million in capital to CDFIs to fund loans through the Treasury Department's newly established Paycheck Protection Program.

Beneficial State Bank, an FDIC-insured CDFI that provides commercial banking services to underserved communities, had received 500 phone calls a day about PPP two days before the program even launched on April 3, Interim CEO Randell Leach said.

Opportunity Fund and Beneficial State Bank are working with borrowers with loan deferment programs and fee waivers. But small businesses need a lifeline more than anything, and Leach said the PPP loans are not enough for the demand he is seeing from Beneficial State's customers.

Leach said the loan size should be 6x to 12x a businesses' average monthly payroll costs, rather than the current 2.5x. Small businesses should also have more than two years to pay back the amount not forgiven, he said. These extensions would allow small businesses to have enough resources to get through the COVID-19 pandemic and then allow them to recover, he said.

Both Urrutia and Leach are also concerned that the $349 billion in small business loans that the program provides will go very fast. Some CDFIs, such as Opportunity Fund, are in the process of applying to become SBA-approved lenders to participate in the PPP. And CDFIs already in SBA programs, such as Beneficial State, are seeing heavy demand for PPP, similar to many other financial institutions, Leach said.

"It's a good framework, but it's not enough," Leach said.

While CDFIs are seeing more donations and greater demand for the funds, Urrutia said the lenders cannot help all borrowers. She said CDFIs have to make decisions on which businesses have the best chance to make it out of the crisis. Urrutia pointed to small businesses such as restaurants, salons and daycares among those that have been hit the hardest.

"Obviously right now we can't be lending to every business," Urrutia said. "We are going to have to make the difficult decision that some businesses just are not going to make it."