(ThyBlackMan.com) This figure has been oft cited since Trump and Congress passed the COVID stimulus relief packages. 90 percent of minority businesses did not get a nickel of money from the SBA’s Payroll Protection Program. For Black owned businesses, the number is even worse. 95 percent got no funding.
In several informal polls on my Facebook pages I asked the same question: “Do you know of any Black owned business that got a COVID stimulus SBA Payroll Protection Program Loan?” There were a handful of “yeses.’ There was an avalanche of “nos.” Some expressed optimism that the grim shutoff of the money spigot to Black businesses might change with the House passage of an added 3 trillion-dollar stimulus package. However, the hope was guarded and cautious.
At first glance, the abysmally low numbers seemed ridiculous. Trump, congressional leaders, and treasury officials loudly pledged that small
businesses were a prime target of the aid program. There was a litany of much publicized online workshops and townhalls on where and how to apply for funding. Many banks announced that they had funds and encouraged businesses to apply. House Democrats sweetened the pot by prying $60 billion out of the loan package for minority banks. Yet, the number of Black businesspersons who got money has barely budged.
There is much justified finger pointing at the SBA, Treasury officials, corporate and bank lobbyists for lax to non-existent oversight, lax rules on who could get the money, and for earmarking far too much of the half trillion business in loans to major corporations. There is equally justified finger-pointing at the banks for tossing up a mountain of paperwork, tax and business filing documents, and account requirements that small business owners had little chance of hurdling. Then there was the muddle, confusion, and constant changing edicts about what and how the money could be used and what if any of it had to be paid back.
Little has changed except the desperation of countless numbers of near penniless, distressed small Black business owners. Overall, the estimated 2.5 million Black owned businesses make up almost one-third of the eight million minority-owned businesses in the United States.
The clock is ticking on the future survival of these businesses. There is still no clear timetable in many states, counties, and cities for when the shelter in rule will end. Even then there is no guarantee that the businesses will be able to quickly open their doors, and when they do that their customers will be back. Many have already closed their doors. Over 100,000 small businesses in early May had reportedly permanently closed their doors. Almost certainly, a significant number of them were Black owned businesses. The worst-case estimate is that one fourth to one third of Black businesses could go under without dramatic and fast financial intervention from government agencies.
This means flipping the script on what is considered a “priority” business. This label has been almost uniformly slapped on major businesses. It must be slapped on small businesses. Streamline the paperwork required and make an iron clad guarantee that the loan is truly “forgivable.” Making funds immediately available for small businesses is vital to counter the inherent ideological and structural tilt toward the big corporations that was built into the relief aid package. Wells Fargo virtually confirmed that in a memo that flatly said that it “prioritized” loans to its biggest and supposedly best customers, namely the major firms. It took much heat for its candor and in quick damage control said it would donate the hefty lending fees it raked into non-profits. At least that is what it said.
Black businesses have long been a specially endangered breed when it came to getting a dime out of banks and the government. The reasons are well documented, the lack of credit, a proven business track record, resources, expertise, and a long-standing cozy business connection and relationship with the banks. Then there is the dizzying gauntlet of wage and tax forms, documents, and filings needed to qualify for a loan. Much of the work is done online and that means having a computer, computer access, and computer skills to go through the cyber paperwork required.
Countless surveys by business groups, federal regulators, and watchdog groups have produced reams of figures to show that despite the PR lip service lenders pay to wanting to loan to small businesses, the paltry number of loans they make annually to small, and especially minority businesses have remained frozen over the past decade.
Black businesses have been a needed engine for employment, wealth building, and financial security for many Blacks. They have served as showpieces for black financial and economic achievement and independence. They have spurred generations to pursue the oft touted American dream of entrepreneurship and the means to be your own boss.
The colossal failure of COVID relief packages to make the survival of Black and minority businesses the priority has been yet another monumental COVID tragedy. Time is running out for many Black businesses. Show them the money.
Tune In The Hutchinson Report Townhall of the Air Saturday May 23, 9:00 AM PST Noon EST on “Saving Black Owned Businesses in L.A and Nationally” Pacifica Radio 90.7FM streamed at kpfk.org
Written By Earl Ofari Hutchinson
One can find more info about Mr. Hutchinson over at the following site; TheHutchinson Report.
Also feel free to connect with him through twitter; http://twitter.com/earlhutchins
He is also an associate editor of New America Media. His forthcoming book is From King to Obama: Witness to a Turbulent History (Middle Passage Press).
