In the crescendo of the pandemic, as businesses struggled to stay afloat despite tough economic times, most hoped the federal relief packages—the Paycheck Protection Program (PPP), in particular—would come to their rescue.

But that wasn’t the case, according to KB and Katie Brown’s print business in Minneapolis. Even after applying with three lenders, they never received any Coronavirus relief loans disbursed between April and August.

“It just doesn’t seem like the program was built to support small businesses,” lamented KB Brown, who is witnessing small companies in his Black-dominated and low-income communities suffer to their closure. “It’s bullshit.”

Congress’s instructions to the Small Business Administration (SBA) was to see to it that Paycheck Protection Program loans cared primarily for microbusinesses in “underserved” markets, which often refers to rural zones, low-income societies, and black-, women- and veteran-owned businesses.

Sadly, the inspector general at SBA hinted in May that it couldn’t find proof that the Administration instructed lenders to do so. 

Soon after, the SBA sent a circular in June saying it had disbursed almost all the loans.

And at the dreadful end, many of the PPP business loans were offered to companies in societies that had more expansive access to other funding programs, as per the Center for Public Integrity’s scrutiny of the SBA’s recent report.

Funding did not reach most of the businesses in the lowest-income societies, where average household income is approximately $40,000 or lower and felt the most impact of COVID. Instead, the Public Integrity’s scrutiny shows the number of beneficiaries hardly totaled to their records of small employers.

The situation was only a bit better in rural zones where PPP loans were funding was disbursed as per the share of small employers.

Another joint May study by the Color of Change and UnidosUS shows that Black Americans and Latin-American businesses were turned down.

However, the SBA maintains that it did not ask loan seekers for their demographic data. 

“Evidence shows that instead of disbursing the much-needed funding to eligible small businesses, the PPP erected so many obstacles and exercised racial inequities,” claims Arisha Hatch, VP of Color of Change, an anti-racist movement.

And in what seems to lend credence to the story, the Bank of America, charged with distributing the most PPP loans sent 50 percent to the country’s topmost-income ZIP codes — way more than it gave to the proportion of small employers in those regions.

Only a meager 8 percent of BOA loans served low-income societies, way below their proportion.

To wrap up

It’s evident that COVID-19 isn’t the only pandemic we’re facing; many small businesses who might have as well benefited from these relief packages will lag and, in the worst situations, collapse. 

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