On Press Call, Accountable.US, Center for Responsible Lending, Main Street Alliance Discuss How Small Business Aid in Next Stimulus Must Be Equitable, Transparent and Targeted
View Zoom Call Recording Here
WASHINGTON, D.C. – Following last week’s mammoth, court-mandated data drop from the Trump Small Business Administration (SBA) of recipients of Paycheck Protection Program (PPP) loans under $150K, government watchdog Accountable.US hosted a press call with leading small business advocates to discuss how the program’s problems with inequity, lack of transparency, and inefficiency were even worse than previously known. As Congress continues to negotiate the next major coronavirus package that will likely include additional small business aid, advocates called on Congress to not repeat the same mistakes that allowed over 100,000 small businesses to shutter and expect a different result. New aid must be data-driven, transparent and targeted to those who need it most — not the rich, powerful, and big corporations.
This week, new polling of more than 8,000 small businesses showed that “1.4 million to 2.8 million jobs will be lost this winter” without an efficient new relief package, and “thirty-three percent of Black-owned, 26 percent of Native American-owned and 21 percent of Hispanic-owned businesses report having less than a month of cash to cover expenses” remaining.
Alongside Ashley Harrington, federal advocacy director and senior counsel at the Center for Responsible Lending, and Sarah Crozier, communications director of Main Street Alliance, Accountable.US Executive Director Caroline Ciccone discussed the ways the Trump administration’s poor design and implementation of the PPP left small businesses nationwide — and especially in communities of color — out in the cold — and what Congress can do to fix it.
Some key quotes from the call:
- Caroline Ciccone, Accountable.US: “Fundamentally, this program was poorly designed and irresponsibly run by Trump’s Small Business Administration. It was billed as a program to keep mom-and-pop stores afloat and keep people employed — unfortunately it really missed the mark. It wasn’t long before serious problems emerged — problems involving waste, fraud, inefficiency, inequity, lack of transparency, and misguided priorities. This perfect storm of incompetence and indifference allowed communities of color and the less fortunate to be left out in the cold.
“Senator Rubio today at a hearing was spiking the football on PPP. It’s far too soon to be spiking the football when there are small businesses that don’t know if they’re going to make it to Christmas,” added Ciccone. “We can and we should take a really hard look at what happened over the course of the last eight months, and then we should learn some lessons. And we should fix those problems moving forward. And you can only do that when you’re transparent and you release the data. It shouldn’t take suing your government to do that.”
- Ashley Harrington, Center for Responsible Lending: “The worst impacts of the COVID-19 pandemic, both health-wise and economically, are being experienced in Black and Latino communities. And yet the relief so desperately needed by these devastated communities has just not been getting there.
“From the start, the PPP was designed and implemented to advantage larger, wealthier firms, with a fee structure that rewarded banks for working with their existing, big business clients. Non-employer firms, including the mom-and-pop businesses often owned by people of color, were not even able to apply during the first week of the program. The delay may have caused irreparable harm to countless small businesses that had to wait on the sidelines while large and well-connected firms were served, a clear failure to meet the objective of the PPP.
Harrington continued, “Congress, SBA and Treasury must remove the barriers limiting relief for the smallest businesses, which communities of color depend on to thrive and survive. Moreover, as the economic downturn continues, it becomes more evident that the smallest businesses, and those owned by people of color, don’t need another loan program. They need direct federal assistance in the form of grants. Our nation’s economic security depends on robust, inclusive relief and recovery strategies.”
- Sarah Crozier, Main Street Alliance: “Small Businesses need support urgently. And Congress needs to pass a package, but if we double down on the wrong programs, and do not invest in the ones that are alleviating the disparities, we are going to come out of the crisis a much weaker country and economy that we could have. To insist on corporate immunity in the bill, but not paid sick days or paid leave supports is putting the priority on policies that are actively detrimental to public health and tackling the pandemic.”
“This new PPP data verifies what we have heard directly from our small business members — that the PPP program advantaged big businesses over small and exacerbated long standing disparities in access to credit and capital for underbanked communities,” added Crozier. “This new information only exemplifies why we can’t simply double down on private loans as a solution for small businesses suffering from the economic impacts of COVID. Businesses need grants in an economic crisis. With one third of small businesses overall and nearly half of black-owned businesses saying they will not make it past the early part of 2021 without additional relief, the urgent need cannot be clearer. The PPP did not reach who it was intended, and many more small businesses will close without a better grants based system.”
A full recording of the call is available here. Follow along with Accountable.US’s findings from the PPP data on its PPP Live Blog, or search the data yourself on the group’s COVID Bailout Tracker.