How will minority-owned businesses fare in CARES 4.0?
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Congress and the White House are still negotiating the next stage of economic response to the COVID-19 pandemic. In a Senate hearing Thursday, lawmakers sought more details on why minority-owned businesses benefited less from the last round of stimulus contained in the Coronavirus Aid, Relief and Economic Security Act and what can be done differently.
Black business owners had a particularly rough time getting access to Paycheck Protection Program funds at first, said Ronald Busby, president of U.S. Black Chambers, a body that represents thousands of business owners.
He told the Senate Committee on Small Business & Entrepreneurship that 70% of his members who applied for PPP loans were denied and almost everyone who was approved received less than they asked for.
The problem, he said, didn’t begin with the pandemic.
“Access to capital is the No. 1, No. 2, No. 3 concern for Black business owners,” he said.
Racial disparities in business lending often push small business owners to nontraditional lenders, which focus on underrepresented groups.
“Many, many clients come to us that had a false start attempt with their bank and never got to the end of the process because they just simply weren’t a high enough priority,” said Marla Bilonick, CEO of the Latino Economic Development Center, who testified at the Senate hearing.
Of course, banks aren’t the only source of capital to help start a business or keep it afloat in a crisis.
“A lot of owners borrow against their home equity through home equity lines or use other, you know, family members or their community to help them,” said Robert Fairlie, an economics professor at the University of California, Santa Cruz.
But, said Fairlie, even that approach tends to reveal economic disparities, highlighting the racial wealth gap in this country and the fact that minority communities are already suffering the worst health and economic effects of the pandemic.
COVID-19 Economy FAQs
What’s going on with extra COVID-19 unemployment benefits?
The latest: President Donald Trump signed an executive action directing $400 extra a week in unemployment benefits. But will that aid actually reach people? It’s still unclear. Trump directed federal agencies to send $300 dollars in weekly aid, taken from the federal disaster relief fund, and called on states to provide an additional $100. But states’ budgets are stretched thin as it is.
What’s the latest on evictions?
For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.
Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?
Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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