Businesses owned by minorities saw PPP loan disbursement delays
White companies received their relief loans earlier in the program
A new study shows that thousands of minority-owned businesses were at the bottom of the list when it came to receiving the government’s coronavirus relief loans. Minority-owned companies struggled to find banks to accept their applications or were limited by the terms of the program, according to the Associated Press.
The Associated Press reported that data from the Paycheck Protection Program released on Dec. 1 revealed that minority-owned small businesses in desperate need of financial support didn’t receive a relief loan until the last few weeks of the program.
However, white business owners received their relief loans earlier in the program, which began on April 3 and ended on August 8.
More than 5.2 million loans totaling $525 billion were issued to help businesses stay afloat during the coronavirus pandemic which forced many businesses to either close or operate at a reduced capacity.
The Associated Press reported that the Small Business Administration approved $349 billion in loans in two weeks due to the overwhelming demand. Some minority-owned companies faced obstacles and many were rejected because they applied to multiple banks at the start of the program. Others claim they never received responses to their applications and inquiries.
Ron Busby, President of the U.S. Black Chambers, a national chamber of commerce, said the lack of aide caused exhaustion for minority business owners.
“Many of our businesses were being turned down in the first and second round of funding. That caused application fatigue and frustration,” Busby said.
In July, an AP analysis saw that larger companies received coronavirus relief loans first. They also reported that many small business owners found out information about application processes and the quickly dwindling loan fund from the news instead of their banks.
John Arensmeyer, the CEO of the advocacy group Small Business Majority, at the time said the favoritism was evident from the beginning.
“The program was structured to take advantage of existing banking relationships that favored established businesses,” Arensmeyer said. “It was not designed for very small businesses.”
Have you subscribed to theGrio’s podcast “Dear Culture”? Download our newest episodes now!
TheGrio is now on Apple TV, Amazon Fire, and Roku. Download theGrio today!