Data released from the Paycheck Protection Program (PPP) shows that minority business owners are desperate for a loan they only received in the final weeks of the program.
The PPP ran from April 3 to August 8 and issued more than 5 million loans worth $ 525 billion. The funds were meant to help businesses pay rent and employees, and help businesses stay afloat if city and state governments forced businesses to shut down as hospital systems, overwhelmed by the pandemic, killed Americans more frequently than most wars.
However, minority business owners applied to several banks to receive funds and were rejected. Others could not get big banks to respond to their inquiries as the PPP was looted by big public corporations like restaurants, hotels and the Los Angeles Lakers.
According to the PPP data analyzed by the Associated Press in the first round of PPP funding, six loans per 1,000 residents were approved for those living in 20% of the postcodes with the highest percentage of white residents. That is almost twice as much as for people who live in 20% of the postcodes with the lowest proportion of white residents.
“Many of our companies were rejected in the first and second funding round. This created application fatigue and frustration, "Ron Busby, president of the US Black Chambers, a nationwide chamber of commerce, told the AP.
Dealing with the PPP, as well as difficulties in accessing capital, working with large banks and obtaining credit, have only compounded the problems of the minority and black business owners are still facing the pandemic. CBS News reported in June that 40% of black-owned businesses could close due to the coronavirus.
Businesses owned by Asian Americans and Latino Americans are also affected by the pandemic on business.
“Many cling to the skin of their teeth. Most are in professional services, small retail stores, restaurants and barbershops, ”Ramiro Cavazos, president of the United States Hispanic Chamber of Commerce, told the AP.
Small Business Association (SBA) spokesman Shannon Giles told Syracuse.com that $ 133 billion, or 25% of PPP funding, went to companies in economically disadvantaged areas known as historically underutilized business zones, and 27% to districts with low and middle income.
Additionally, large banks that ignored their smaller customers have been shamed not only in making it easier to apply for and receive PPP loans, but several, including Citi, JPMorgan Chase and Capital One, have pledged to support minority businesses going forward.
Entrepreneurs of all races should find it easier to apply for loans from another infusion of PPP money that passed in the last month. The SBA has added 2,000 banks, non-banks and online lenders to its original list of 3,000 banks that can accept and process loan applications.