This archive report was first published on 18 May 2020.
As the COVID-19 pandemic continues to ravage the economy, minority-owned businesses are facing unprecedented challenges in accessing government aid. A recent survey conducted by the Global Strategy Group for Color of Change and UnidosUS has shed light on the struggles faced by these businesses, with alarming results.
Between April 30 and last Monday, the survey interviewed 500 business owners and 1,200 workers, revealing that only 12% of owners who applied for government-backed loans in the $650 billion Paycheck Protection Program received what they had asked for. This is a stark contrast to a survey conducted by the Census Bureau from April 26 to May 2, which found that three-quarters of small businesses had asked for a loan and 38% of them had received one.
According to Rashad Robinson, president of Color of Change, the survey highlights the urgent need for policies to protect these communities. “If we don’t get policies to protect these communities, we will lose a generation of black and brown businesses, which will have deep impacts on our entire country’s economy,” he warned.
The survey also found that two-thirds of respondents sought loans of under $50,000 through the government’s aid program, with nearly half having to lay off at least some employees. The results suggest that the historically weak relationships between minority business owners and banks are making it harder for them to tap into the aid program.
Equal-rights advocates and lawmakers are pushing for more help for minority business owners to be built into the government’s response to the pandemic. The second round of funding for the loan program has set aside $60 billion for small and rural banks and nonprofit lenders, which often do more work in minority communities than large banks do.
