Minority-Owned Small Businesses Were Supposed To Get Priority. They May Not Have


There's a big question looming over the paycheck protection program. The Gut the federal government set up that aid. Money is not reaching business owners of color Wi- NPR's Daniel Kurtzer looked into it. The first time Rosemary Borja applied for the small business relief loans. It didn't go well. She needed a loan for Neko Creative Minneapolis based which has created ad campaigns for brands like the NCAA final four. So she went to her. Credit Union should reach. But eventually I got through to someone and they emailed me back saying they can't process them because they don't process. Sba Loan I wasn't aware of that. Then after trying and failing it to other banks she managed to find one that was accepting applications from new customers and she quickly applied but the next week. I I got an email from them saying you know. The money's running out and then now just going to prioritize their clients that had boroughs before the Bulla has applied there again during the second round of funding but hasn't heard back yet but she could use the money and fast. Her team is currently working through the pandemic without pay we have a healthy pipeline coming into this year. As soon as this came Dow- everything went on hold and then disappear. Lawmakers set aside thirty billion dollars for smaller lenders with an aim of helping business owners of color like Boba but a new report from the small business. Administration's Inspector General found that minority owned businesses may not have received loans as intended because the agency didn't tell lenders to prioritize those borrowers. The cares act had rules specifically laying this out the report also recommended that the agency collects demographic information going forward. An additional problem for these owners is that they are more likely to be sole proprietors in other words. Their businesses are owned by one person. According to Ashleigh Harrington Senior Policy Counsel at the Center for responsible lending we're talking about businesses of color. Most of them are very small businesses so their sole proprietorship or they have left teams. Leave in fact more likely to be a sole proprietorship in any of the other. Small businesses budget has six people on her team. And they're all contractors making her business one of one person sole proprietorships. Some of those were only allowed to apply for P. P. Funds one week after other businesses that put them in the back of the line to get the money which ran out quickly during the first round in addition relationships with banks matter according to Michael Roth. He's managing partner at next street which works with local governments on small business policy. Black and Hispanic owned businesses because of their lack of access to capital from banks and financial institutions and friends and family are far more likely to use personal funds to finance their businesses. And generally. That's run out of you know personal checking accounts that could be a problem for some businesses in the program because some banks would only loan to people with business accounts so owners without those. Were shut out. The boy says that if she doesn't get the funding it won't take her business down completely but it could make life harder. The main thing that we're on the verge of losing is our office space. Yeah we won't go out of business but it's already hurt the contractors who rely on her for income one of my team members and taken a job with Amazon for example but but with still pushing to get business in for now. She says they're working on a new project to make sure health information about corona virus can reach poor and immigrant communities as well as communities of Color

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