A survey conducted by the Small Business Majority, a small business advocacy organization, revealed that 63 percent of Black and Latino small business owners applied for and received funding, but three in ten did not receive the amount they requested.
Small Business News
I encourage members of Congress to vote in favor of the Paycheck Protection Flexibility Act this week to ensure small businesses receive the support we need through the loan program. PPP wasn’t set up in a way to provide adequate relief for small businesses, but this legislation works to fix that.
Many trade groups for lenders and small businesses, such as the Consumer Bankers Association and the Small Business Majority, have asked for blanket forgiveness for loans of less than $150,000. So far, the Small Business Administration and the Treasury Department — which is calling the shots on most of the paycheck program’s terms — have not indicated any willingness to grant that.
“These programs are being run through an intermediary — that is, the banks, which favor people who already have relationships with them,” said John Arensmeyer, the CEO of the advocacy group Small Business Majority. “Underserved communities in particular may not have those relationships.”
The best advice for small businesses? "Wait to see what the guidance and rules are and then consult with your accountant," said Brian Pifer, vice president of entrepreneurship at the advocacy group Small Business Majority. Or whatever other expert you've been consulting until now, such as a lawyer or your lender.
Their allies have thus far included Economic Innovation Group, Engine, InBIA, Information Technology and Innovation Foundation, Progressive Policy Institute, Small Business and Entrepreneurship Council, Small Business Majority, TechNet, and Third Way.
This "eases the requirement that businesses return their payroll to pre-pandemic levels, so long as they have made attempts to rehire staff,” said John Arensmeyer, CEO of Small Business Majority, a nonprofit in Washington D.C.
In a March survey by the Small Business Majority advocacy and education group, 44% of small-business owners said they would have to shut down for good without immediate financial help. Many did receive forgivable loans under the Coronavirus Aid, Relief, and Economic Security Act passed by Congress. But big wads of emergency federal loan money went to fast-food chains, hotels and other companies with big bank relationships and the wherewithal to hire high-priced lawyers, accountants and lobbyists.
Mark Herbert with the Small Business Majority, an industry group, is pushing for that extra support.
“We have to have government-backed capital to survive the next six months,” he said. That’s particularly true for “businesses that are not likely accessing federal relief and not accessing traditional forms of credit.”
A separate survey from the Small Business Majority, a small business advocacy organization, showed that 63% of Black and Latino small business owners sought and received financing, but 3 in 10 did not receive the amount they requested.