Study: Whites Treated Better Than Blacks When Seeking Business Loans

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[National Community Reinvestment Coalition]
Sterling Bone: "We find troubling patterns that that loan program, that PPP program, was not offered equally across our test groups."
Photo: YouTube

A new study out Wednesday found "troubling patterns" in how Black and white loan applicants were treated when seeking help for small businesses during the coronavirus pandemic.

The study by the National Community Reinvestment Coalition used a match-pair "mystery shopper" test, where a Black and a white applicant with nearly identical business profiles and strong credit histories would contact the same bank. In 27 of the 63 cases, white business owners received more favorable treatment than the Black business owners.

Sterling Bone, one of the study's authors and a professor of marketing at Utah State University, said in an interview with ABC News that one of the goals was to measure how often bank representatives offered applicants the Paycheck Protection Program.

"From a research standpoint, the pandemic provided a significant market shock in the environment," he said. "One area of interest in our work is to understand how these market shocks affect all individuals, particularly those that are of minority backgrounds."

"We find troubling patterns that that loan program, that PPP program, was not offered equally across our test groups," he added.

For the rest of this ABC News story log on to: https://abcnews.go.com/Business/black-white-applicants-treated-different...

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