Feds’ guidance hurt minority-owned businesses’ PPP chances, report says
Share Now on:
As the White House and Congress continue talks about a new relief bill, we’re learning more about how the last one played out — especially when it comes to the Paycheck Protection Program.
A new report from the House Select Subcommittee on the Coronavirus Crisis found that the Treasury Department suggested that banks should favor their existing customers when they applied for Paycheck Protection Program loans. That meant that some businesses, especially ones owned by women and minorities, were left out in the cold.
Back in April, J. Craig Gordon tried to apply through a bank for a PPP loan for the home health care company he runs in Savannah, Georgia.
“It wasn’t a situation where we could even get an application in,” he said.
He didn’t have a relationship with that bank. He tried applying through another bank. No luck there, either.
Gordon cut his own salary and put expansion plans on hold.
“The next layer of cuts unfortunately was gonna probably have to be some administrative layoffs. But thank goodness we weren’t in a situation where we had to do that,” he said.
Hurdles like the ones Gordon had to clear discouraged many Black business owners from applying for PPP loans, said Amanda Ballantyne, executive director of the small business advocacy group Main Street Alliance.
“Black business owners were 50% more likely than white business owners to believe they wouldn’t be approved and were three times more likely than white business owners to be unaware that the program even existed,” she said.
A Main Street Alliance and Color of Change poll found that almost half of Black-owned small businesses have either shut down already or will soon.
And even for those that managed to stay open, the pandemic recession is likely to do long-term damage, said Rashad Robinson, president of Color of Change, a racial justice nonprofit.
“They maybe lose connections with some of their customers, with the supply chain, maybe for materials or other things necessary to keep the business alive,” he said.
That damage to businesses, Robinson said, makes Black communities more susceptible to gentrification.
This piece has been updated to include the names of both groups that conducted the survey of Black-owned businesses.
COVID-19 Economy FAQs
Pfizer said early data show its coronavirus vaccine is effective. So what’s next?
In the last few months, Pfizer and its partner BioNTech have shared other details of the process including trial blueprints, the breakdown of the subjects and ethnicities and whether they’re taking money from the government. They’re being especially transparent in order to try to temper public skepticism about this vaccine process. The next big test, said Jennifer Miller at the Yale School of Medicine, comes when drug companies release their data, “so that other scientists who the public trust can go in, replicate findings, and communicate them to the public. And hopefully build appropriate trust in a vaccine.”
How is President-elect Joe Biden planning to address the COVID-19 pandemic and the economic turmoil it’s created?
On Nov. 9, President-Elect Joe Biden announced three co-chairs of his new COVID-19 task force. But what kind of effect might this task force have during this transition time, before Biden takes office? “The transition team can do a lot to amplify and reinforce the messages of scientists and public health experts,” said Dr. Kelly Moore, associate director for the Immunization Action Coalition. Moore said Biden’s COVID task force can also “start talking to state leaders and other experts about exactly what they need to equip them to roll out the vaccines effectively.”
What does slower retail sales growth in October mean for the economy?
It is a truism that we repeat time and again at Marketplace: As goes the U.S. consumer, so goes the U.S. economy. And recently, we’ve been seeing plenty of signs of weakness in the consumer economy. Retail sales were up three-tenths of a percent in October, but the gain was weaker than expected and much weaker than September’s. John Leer, an economist at Morning Consult, said a lack of new fiscal stimulus from Congress is dampening consumers’ appetite to spend. So is the pandemic.
As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.
Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.
Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.