By Christopher Pitts
- Approximately 12% of Black and brown business owners who applied for PPP received the amount of money originally requested
- Black business ownership is down almost 40% since the coronavirus pandemic ensued
The disappearance of Black businesses is becoming more severe by the day, as economic conditions deteriorate due to the COVID-19 crisis impact on minority communities. Black business ownership is down almost 40% since the pandemic first reached the United States a few months ago. Industries that many Black businesses operate in such as retail and support services, are helping with social distance policies and might also potentially eradicate the legacy of Black business in America.
Why This Matters: Even with the passage of the $2 trillion economic relief CARES Act, both Black and brown owned businesses received the fewest dollars when compared to other ethnic groups. In fact, just about 12% of Black and brown business owners who applied for the PPP received the amount of money they originally requested, according to a survey by the Global Strategy Group. Nearly half of those individuals anticipate being forced to close indefinitely in the near future.
Many experts feel the relationship between Black business owners and major banks has accelerated the demise of these companies across the country during the pandemic. The most recent Federal Reserve data illustrates that Black owners are denied loans at twice the rate of white owners.
Federal Reserve data illustrates that Black owners are denied loans at twice the rate of white owners
Not to mention that the Center For Responsible Lending predicted the current PPP problem back in early April. It found that roughly 95% of Black-owned businesses and 91% of Latino-owned businesses “stand close to no chance of receiving a PPP loan through a mainstream bank or credit union.”
Situational Awareness: The PPP program was the first time some Black and Latino business owners had ever requested a bank loan and, and according to the New York Times, “many banks considered applications only from existing customers.” If the Federal Government does not implement policies to protect these vulnerable communities, we could lose an entire generation of Black and brown businesses.
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