Thousands of minority-owned small businesses in the United States were at the end of the line in the government’s emergency aid program for the coronavirus pandemic, data analyzed by The Associated Press reveals. Many small business owners struggled to find banks to accept their applications or were disadvantaged by the terms of the program.
Information from the Paycheck Protection Program (PPP) released Dec. 1 and analyzed by the AP shows that many minority homeowners desperate for a relief loan did not receive one until the last weeks of the PPP, while many more white business owners were able to get early program loans.
The PPP, which began on April 3 and ended on August 8 and granted 5.2 million loans worth $ 525 billion, helped many companies to stay on their feet at a time when government measures to control The coronavirus forced many to close or operate at a lower capacity. However, it fell short of fulfilling its promise to help communities that historically have not received the help they needed.
Congress approved a third round of PPP loans worth $ 284 billion. While companies that have not previously obtained loans have another chance to help, according to a draft of the legislation, companies hardest hit by the virus outbreak will be eligible for a second loan.
The first round of the program was in overwhelming demand and the Small Business Administration approved $ 349 billion in loans in just two weeks. But many minority-owned companies submitted applications to multiple banks early in the program and were rejected, while others were unable to get the banks to respond to their requests and inquiries.
“Many of our companies were rejected in the first and second financing rounds. That caused application fatigue and frustration, “said Ron Busby, president of the US Black Chambers, a national chamber of commerce focused on supporting black entrepreneurs.
“Many are barely surviving,” said Ramiro Cavazos, president of the US Hispanic Chamber of Commerce. “Most are in professional services, small retail stores, restaurants and hair salons,” he said.
“Many of our Hispanic-owned businesses never received a response from their banks in the first round or were rejected. They had to wait until the second round, and many had to leave their banks and go to a community lender or a non-profit agency run by minorities, ”added Cavazos.
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AP data reporter Justin Myers reported from Chicago
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