Address racial disparities in access to business relief programs.
The very businesses that need support the most, received the least support from the first rounds of COVID relief support. Inequity was built into the PPP program with 95 percent of Black-owned businesses and 91 percent of Latinx-owned businesses effectively shut out of the program due to their size and lack of relationship with SBA 7(a) lenders. With fewer cash reserves and access to capital, recent studies show that the number of working black business owners fell by 40 percent, far more than other groups amid coronavirus Some are proposing modest changes to the PPP program to address the disparities in access - this is not enough. We need targeted equity grant programs with direct outreach that delivery support through a variety of channels:
Specific Racial Equity Proposals.
Direct Treasury targeted grant program. Senator Harris’ and Rep. Pressley’s Saving Our Streets Act provides up to $250,000 in direct grants to micro businesses (under 20 employees) or nonprofits through the newly established Micro Business Assistance Fund that can be used for payroll, rent and mortgage, utilities and other business expenses, including PPE and hazard pay.
Expand funding for state and local grant funds. The bipartisan RELIEF for Main Street Act Sen’s Booker, Murray and Daines Act directs $50 Billion in funding to state and local funds to significantly boost support for very small businesses (under 50 employees) through state and local funds that can devise flexible programs to reach those most in need and has bi-partisan support. The Act also ensures that next rounds of PPP and EDIL are better targeted to reach those left out of first rounds through set-asides, reporting and increased outreach. (RELIEF Act)
Targeted PPP. Senator Cardin, Senator Coons, Senator Shaheen’s Prioritized Paycheck Protection Program (P4) Act is an important contribution, but not a comprehensive solution, to addressing equity within PPP. The proposal, which targets aid and direct assistance to very small businesses to apply for PPP is supported alongside other equity measures.
Reporting. All support programs must include reporting by race, business size, industry and geography to ensure resources are reaching those most in need.
“At this moment it’s imperative for all of us to look at how we can support Black businesses and Black people through a worldwide pandemic,” Natasha Crosby, realtor and Main Street Alliance Member said. “If we want to examine the injustices that have taken place, then let’s really put our money where our mouth is.”
— Natasha Crosby, Natasha Crosby Realty, gives a first-time homebuyers seminar pre-pandemic. Read the full story on Huffington Post: COVID-19 is Shattering Small Businesses. Their Survival Depends on Us.
