WASHINGTON, D.C. – A new report from the Federal Reserve today found that the economic fallout from COVID-19 hit Black-owned businesses particularly hard. The report emphasizes the acute concentration of coronavirus cases in majority-Black communities nationwide, and the hardships businesses in those communities have faced as a result. The Fed report estimated that a devastating 41% of Black-owned businesses across the U.S. were forced to close between February and April during the height of the crisis.
The report adds further weight to an Accountable.US report from late last week showing that Trump’s Paycheck Protection Program, a relief fund intended to support mom-and-pop businesses during the pandemic crisis, failed Black-owned businesses: the ten congressional districts with the highest percentage of Black residents got $13 billion less in PPP money and 64,000 fewer PPP loans than the ten congressional districts with the lowest percentage of Black residents.
“As we learn more information about the Paycheck Protection Program, it becomes clearer and clearer that the program failed Black-owned businesses — and that it was not built to help them in the first place,” said Kyle Herrig, president of Accountable.US. “The PPP was poorly designed. It allowed wealthy, well-connected businesses to run away with funds with almost no oversight as actual small businesses were boxed out. Congress needs to make sure the next relief package they pass includes measures to ensure that relief funds reach the communities that need the most support.”
For more information, please see:
- Coverage in Reuters and Axios of Accountable.US’s report on racial disparities in PPP distribution by congressional district.
- Accountable.US’s fact sheet on how the PPP failed minority-owned businesses.
- A letter to congressional leaders from Accountable.US President Kyle Herrig and former Small Business Administration (SBA) Administrator Marie Johns demanding that the next PPP be transparent, data-driven, and aligned with the needs of the communities that need the help the most.