Many minority-owned businesses received their PPP loans much later than expected. White companies received their relief loans earlier in the program.
What We Know:
- Data from the Paycheck Protection Program released Dec. 1 and analyzed by The Associated Press show that many minority owners desperate for a relief loan didn’t receive one until the PPP’s last few weeks. Many more white business owners were able to get loans earlier in the program. The program began on April 3 and ended on Aug. 8 and handed out 5.2 million loans worth $525 billion. It helped many businesses stay on their feet during a period when government measures to control the coronavirus forced many to shut down or operate at a diminished 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, according to Black Media Daily.
- In July, an AP analysis saw that larger companies received coronavirus relief loans first. They also reported that many small business owners found information about application processes and the quickly dwindling loan fund from the news instead of their banks.
- Loan data analyzed according to ZIP codes found that in the first round of funding, six loans were approved for every 1,000 people living in the 20% of ZIP codes with the greatest proportions of white residents, nearly twice the rate of loans approved for people living in the 20% of ZIP codes with the smallest proportions of whites.
- The first round of the program saw overwhelming demand, and the Small Business Administration approved $349 billion in loans in just two weeks. But many minority-owned firms applied to multiple banks early in the program and were rejected, while others couldn’t get banks to respond to their applications and inquiries.
Congress has approved a third, $284 billion round of PPP loans. Companies that did not get loans previously have another chance at the help. According to a draft of the legislation, businesses hard-hit by the virus outbreak will be eligible for a second loan.
