By Anna Peel. Originally published at ValueWalk.
Days Before PPP Expiration, SBA Expands Eligibility For Small Business Owners with Criminal Records
SBA’s New Rule is Too Little, Too Late for Small Business Owners Seeking Relief
Q1 2020 hedge fund letters, conferences and more
Sba Expands Eligibility For Small Business Owners With Criminal Records To Access PPP Loans
WASHINGTON, D.C. – Yesterday, the Small Business Administration (SBA) announced that it would expand eligibility for small business owners with criminal records to access Paycheck Protection Program (PPP) loans. The new rule, while a step in the right direction, comes just days before the PPP is set to expire on June 30th — meaning that those with new access to the program, a population that is disproportionately Black and Latino, will likely not have adequate time to apply for and obtain these funds.
“The SBA treating small business owners with criminal records as an afterthought in the administration of PPP assistance is discriminatory and shameful,” said Kyle Herrig, president of Accountable.US. “Expanding eligibility on the eve of the program’s expiration is clear lip service from an administration that has failed communities of color and small businesses throughout this crisis and long before it.”
The failure to include these business owners with access to PPP assistance from the start further perpetuates racial and economic discrimination against formerly incarcerated people, those with pending misdemeanor charges, and those on probation or parole.
Businesses Impacted By The Pandemic Have Been Left Empty-Handed
The program has left many of the businesses impacted by the pandemic empty-handed as it failed to take into account the widely varying needs and limitations of small businesses around the country. At the same time, large chains and other publicly traded companies have jumped to the front of the line and received millions in taxpayer-funded bailout money.
Recent numbers show how the program has been detrimental to minority-owned businesses:
- 90% of businesses owned by people of color will not be able to access PPP funding, according to the Center for Responsible Lending.
- A recent survey found that only 12% of Black and Latino/a business owners received the SBA relief they had applied for, with 26% saying they “received only a fraction of what they had requested.”
- A recent report by the National Bureau of Economic Research found that the total number of Black-owned businesses in the U.S. fell 41%, from 1.1 million in February to 640,000 in April, because of fallout from the coronavirus.
- Non-employer businesses had to wait a week before applying, which presented a problem because nearly 95% of Black-owned firms were non-employers and 91% of Latino-owned firms were non-employers. In comparison, 78% of white firms are non-employer businesses.
- 40% of black-owned businesses are not expected to survive coronavirus, according to a study by the University of California at Santa Cruz.
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