Congress Pressured to Fund Black Businesses Struggling from COVID-19

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[Black Businesses]
Politico: “One widely cited economic analysis showed that Black-owned businesses were slammed the most by Covid-19, with the number of owners plunging by 41 percent from February to April.”
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Congress is under pressure to address problems Black businesses are facing due to COVID-19.

Lawmakers negotiating the next small-business rescue package are facing mounting pressure to direct more aid to minority employers who are hurting the most during the pandemic but have struggled to access hundreds of billions of federal dollars unleashed since March.

Business groups and consumer advocates are lobbying Congress to rethink a model that has leaned heavily on distributing funds via private lenders because of concerns that the smallest businesses lack relationships with traditional banks.

A bipartisan proposal by Sens. Steve Daines (R-Mont.) and Cory Booker (D-N.J.) — backed by the U.S. Chamber of Commerce — would make $50 billion in grants available to state and local governments for the smallest businesses and nonprofits.

And Senate Small Business Chair Marco Rubio (R-Fla.) is floating new ways to aim funds at the hardest-hit businesses. The expected revamp of the Paycheck Protection Program — the $670 billion effort Congress created to rush forgivable loans to millions of small businesses — is likely to still rely on banks. But Rubio has circulated plans to target long-term loans at businesses that make most of their money in low-income communities and to set aside $25 billion for those with 10 or fewer employees.

“It’s not as simple as just keeping the lights on for the PPP forever,” said Thomas Sullivan, vice president of small business policy at the Chamber of Commerce. “There really does need to be an emphasis toward the underbanked.”

The drive has taken on greater urgency in recent weeks as economic data and surveys have revealed that Black business owners in particular have been disproportionately devastated by the coronavirus recession. The trend holds damaging long-term implications for minority communities as the U.S. moves into what is likely to be an uneven economic recovery.

One widely cited economic analysis showed that Black-owned businesses were slammed the most by Covid-19, with the number of owners plunging by 41 percent from February to April. Research by the JPMorgan Chase Institute showed cash balances for Black businesses were down by 26 percent at the end of March from a year earlier, compared with a 12 percent decline for all firms.

For the rest of this Politico story log on to: https://www.politico.com/news/2020/07/07/congress-rescue-black-owned-businesses-348399

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