Over the past year, COVID-19 and its variants have plagued the globe taking lives and interrupting normal activities in virtually all areas of life. For Black America, already plagued with steep health, income, and wealth disparities, coping with the pandemic has been even more painful.<\/p>\n
With less income, higher unemployment, and less access to financial resources, both businesses and consumers alike strive to hold on for much-need relief. In many cases, modest financial resources are either gone or near their end, and the patience to cope has worn thin.<\/p>\n
In response, an unparalleled\u00a0coalition<\/a> of more than 100 national, state, and local advocates are pressing Congress and the Biden administration for substantive changes to deliver equitable relief to underserved communities. Foremost in the coalition\u2019s concern was getting Paycheck Protection Program (PPP) funds to deserving but largely left-out businesses from earlier funding rounds.<\/p>\n \u201cThe design of PPP strongly disfavored businesses owned by people of color, who generally do not have established banking and face greater obstacles in capital access,\u201d the coalition wrote. \u201cMoreover, the incentive for lenders to fund large loans, which yielded larger fees, has proved to be a barrier to entry for the vast majority of businesses of color.\u201d<\/p>\n Fortunately, it was announced Monday that new PPP approvals will be restricted to businesses with 20 or fewer employees for two weeks in order to target smaller businesses with relief. The SBA will also implement new rules in the coming days that will lessen barriers for small businesses in several areas. These key changes will provide better access and equitable assistance, using gross income instead of net profit as an eligibility measure, improved practices collecting demographic data, and eliminating student debt defaults\/delinquency from borrower applicants.<\/p>\n Despite these changes, however, more must be done to aid businesses that were already underserved by PPP.<\/p>\n \u201cMany Black, Latino, Asian, and immigrant business owners are sole proprietors and independent contractors \u2014 vital to their communities,\u201d said Ashley Harrington, director of federal advocacy with the Center for Responsible Lending (CRL). \u201cCongress should make increased loan amount eligible for sole proprietors and independent contractors retroactive, as they did when the rule changed for small farmers and ranchers. We must ensure all vulnerable businesses have equitable access to the relief they need to weather this crisis.\u201d<\/p>\n Well-known national organizations such as the NAACP, National Action Network, and the National Fair Housing Alliance, are partnering with Black business organizations like U.S. Black Chambers, Inc. and the United States Hispanic Chamber of Commerce, along with local partners including the Boston Impact Initiative, Chicago Urban League, and Pacific Community Ventures.<\/p>\n Speaking in a united voice to federal officials, this\u00a0coalition<\/a>\u00a0of organizations and businesses called directly on Feb. 12 for race-explicit solutions to the new PPP relief. Substantiating this appeal was data that showed that these same businesses that previously missed out on PPP funding collectively provide 8.7 million jobs, $280 billion in annual payroll, and $1.3 trillion in revenue.<\/p>\n \u201cThis targeted aid should serve as a model for a long-term revitalization program aimed at providing small businesses in these hard-hit areas with the resources to recover faster and emerge strong,\u201d\u00a0said<\/a>\u00a0Luke Pardue, an economist with Gusto, a national data firm specializing in small businesses and a member of the coalition. \u201cSuch a plan could take the form of targeted block grants that Congress provides to distressed localities, who are then able to spend the funds on small business development, job training, and support programs to improve job retention. Congress could make the Neighborhood Capital Investment program permanent with $12 billion in annual appropriation.\u201d<\/p>\n in its own independent PPP\u00a0analysis<\/a>, CRL also noted the pandemic\u2019s profound effect on small businesses.<\/p>\n \u201cAt the outset of the program and during the first round of funding from April 3 to April 16, 2020, it was clear that structural inequities were built into the administration of the program, the application process, and the fee structure,\u201d states a CRL policy brief. \u201cThese structural inequities made it extremely difficult for small businesses \u2014 and particularly businesses owned by people of color \u2014 to qualify for assistance or receive it in time to save their businesses and the jobs of the employees that depend upon them.\u201d<\/p>\n Additionally, and according to CRL, PPP administration by the Small Business Association failed to require demographic data to determine if lenders prioritized underserved markets and businesses, and consequently failed to issue lender data about prioritizing borrowers in underserved markets as well.<\/p>\n Just as Black businesses struggle to access capital, exclusionary housing policies have made it nearly impossible for Black families to build home equity on parity with whites and\/or convert home equity into wealth needed to begin a business. In short, denied access to finance is a key reason why many Black consumers struggle as renters instead of becoming homeowners.<\/p>\n Representing the nation\u2019s largest trade association with its 1.4 million members working in residential and commercial real estate, the National Association of Realtors\u00a0recently released a report<\/a>\u00a0that analyzed data from the Census Bureau\u2019s American Consumer Survey. From a racial perspective, NAR examined homeownership over the past decade, looking at characteristics of who purchased homes, their reasons, and financial backgrounds.<\/p>\n Noting that homeownership boosts consumer wealth, NAR concluded that the net worth of a homeowner is 40 times that of a renter: $255,000 versus $6,300 in 2019. But, according to NAR, not all families enjoy the same access to homeownership, and homeownership itself does not offer a complete perspective.<\/p>\n White consumers have consistently held a homeownership rate of 70% or higher. But over the past decade, Black homeownership, the single group most negatively affected by the Great Recession, dropped from 2009 to 2019 to 42%, less than that of Latinos at 48%, or Asian-Americans at nearly 61%. Depending upon locale, White homeownership ranged from 49-78%, Black homeownership ranged from a low of 5% in North Dakota to 70% in Puerto Rico. In the continental United States, 2019\u2019s highest rates of Black homeowners were in South Carolina and Maryland, both at 52%.<\/p>\n