Why we’re suing to release small business funds Congress already approved

Your local coffee shop owner, pet groomer, corner store, doctor, and plumber make up the more than 36 million small businesses that create almost half of our nation’s jobs and shape the neighborhoods where we live. Soaring inflation is making it increasingly difficult for entrepreneurs to survive. Americans and leaders from both parties agree that we need to invest in programs that support Main Street small businesses. So why are hundreds of millions of dollars being withheld from one of the country’s most important small business lending programs?

The Community Development Financial Institutions Fund is a Treasury program that capitalizes community lenders. It enjoys bipartisan support and the fund is a great example of a working public-private partnership, leveraging $8 in private sector investment for every $1 in public funding.

These investments are found in nearly every American community — red and blue districts, rural counties and dense urban neighborhoods, and Native communities. Such institutions exist in all 50 states and nearly every congressional district in the country. Since Congress created it in 1994 with bipartisan support, the fund has helped channel billions of dollars each year into small businesses that mainstream banks routinely turn away — not as a subsidy, but as a bet on entrepreneurs who pay it back and build local wealth in the process.

That is why we, the leaders of two organizations that support hundreds of community lenders and the small businesses they serve, have decided to stand up for our members, small businesses, and the rule of law.

Congress appropriated $324 million for the Community Development Financial Institutions Fund in fiscal 2025 and again in 2026 — the largest core funding level in the program’s history. Very few issues enjoy bipartisan support in Congress these days, but the this appropriation passed with strong support from both parties, an acknowledgment of its critical role in America’s small business economy.

Under the law, that money is required to reach certified Community Development Financial Institutions so they can keep lending. Instead, the administration has repeatedly taken hostile actions against the program, culminating in the current withholding of funds that Congress intended for these institutions to receive before Sept. 30, 2026. The result: Hundreds of millions of dollars that Congress has appropriated are sitting unused, and the clock is ticking. If the fiscal 2025 funds are not disbursed by then, these critical dollars will expire forever.

This isn’t a policy disagreement we can resolve by waiting it out. When the executive branch declines to spend money Congress has lawfully appropriated for its intended purpose, the administration is not exercising discretion, it is overriding the constitutional authority of the legislature, which is why we believe the law is squarely on our side.

The decision to file a lawsuit was not taken lightly. We would much rather be spending our energy advising entrepreneurs and investing in our communities. But lenders across the country are making real decisions right now — shelving loan pipelines, turning away small business borrowers — because they cannot plan around money that was appropriated by Congress and then withheld by the administration.

Let us be clear about the stakes. It’s the bakery in a rural Idaho town that got its first real line of credit from a local loan fund. It is the childcare provider in Detroit who used the capital to become licensed and expand. It’s the manufacturer in North Carolina that added a second shift after such an institution helped it buy new equipment. Without these institutions’ dollars, these businesses would not be thriving as they are today.

Members of Congress from both parties understand this. In fact, hundreds of members have gone on record in support of the Community Development Financial Institutions Fund, because they have seen its impact in their districts. This is one of the rare federal programs that draws support from lawmakers who agree on almost nothing else, precisely because it works and because it belongs to no single party.

The administration is required to honor an appropriation that Congress passed, the president signed, and communities are counting on. Every month of delay is a month of loans not made, jobs not created, and small businesses left to fend for themselves.

That’s why we’ve taken unprecedented legal action . Small businesses in every congressional district in America can’t afford to be kept waiting.

Carolina Martinez is CEO of CAMEO Network, a national network of Community Development Financial Institution Fund s and other business support providers supporting the nation’s smallest businesses. Rudy Espinoza is president and CEO of Inclusive Action.