According to the first nationwide assessment of COVID-19’s economic impact on minority small businesses, only one in 10 received the funding they requested.
Without governmental assistance in the next six months, almost half Black and Hispanic small-business owners in the U.S. say their businesses may not survive the crushing economic fallout due to the COVID-19 epidemic that has left millions of Americans furloughed, jobless or working reduced hours.
The survey is the first nationwide assessment of COVID-19’s economic impact on Black and Latino small-business and non-profit owners. It was conducted from April 30 through May 11, 2020, by Global Strategy Group for Color Of Change, the nation’s largest online racial justice organization, and UnidosUS, the nation’s largest Hispanic civil rights and advocacy organization.
The results of the survey seem to point out the glaring racial inequalities in the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) created by the CARES Act that are leaving African American and Latino small businesses without the support they need to stay afloat during these economic hard times.
According to the report, the PPP Program has offered insufficient support to small-business owners of color. In fact, respondents believe that the stimulus was passed primarily to protect major corporations’ best interests (82%), with too little funds for small businesses (71%).
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This claim is backed up by a summary of key takeaways from the survey’s data:
- Of those who applied for funding to keep their businesses afloat, only 1 in 10 received the funding they requested.
- Almost half, or 45%, of Black and Latino small-business owners reported that they will be forced to shut their doors by the end of the year, if not sooner, despite two rounds of PPP support.
- Fifty-one percent of Black and Latino small business owners surveyed report applying for less than $20,000, but only 12% received the full amount of assistance requested. And 45% of those who received either partial or full assistance had to wait more than two weeks to receive their funds.
- Forty-one were denied assistance, while 21% say they are still waiting to hear if they will receive any assistance.
- Small-business owners with full-time employees had to make cuts to their payroll obligations, reducing hours (44%), and wages (13%), as well as laying-off (21%), or furloughing (6%) employees.
Priorities Moving Forward
In the survey, Black and Hispanic small-business owners identified the following priorities for their businesses, their employees, and communities as Congress considers another round of stimulus:
- Directing federal assistance to prevent mass layoffs and keep them alive so they restart and rehire workers (89%)
- Suspending foreclosures on individually owned and small business properties until the end of the crisis (86%)
- Directing federal financial assistance to businesses to help them cover salary and other necessary costs (82%)
- Suspending negative credit reporting until the end of the crisis (81%)