Democrats Push for More Black Business Stimulus

From February to April 2020, the number of active Black business owners fell over 40% (from 1.1 million to 640,000), according to a new paper by UC Santa Cruz economics professor Robert Fairlie. This decline was more severe among African Americans than the decline among business owners who are Latino (32%), Asian American (26%), or White (17%). See academic working paper and Washington Post story.

According to a survey commissioned by Color of Change and UnidosUS, 69% of Black business-owners applied for $50,000 or less when applying for federal relief loans and only 8% of Black business-owners received the amount they requested. Color of Change President Rashad Robinson stated in the New York Times, “if we don’t get policies to protect these communities, we will lose a generation of Black and brown businesses, which will have deep impacts on our entire country’s economy.”

The African American Mayors Association is asking Congress to include Senator Cory Booker’s (D-NJ) RELIEF for Main Street Act into the next COVID-19 stimulus legislation. Senator Booker’s proposal calls for $50 billion to be earmarked for states and local municipalities to allocate to small and minority-owned businesses through loans and grants. Third Way proposes a number of ways to save small businesses, including a recommendation to support Senator Booker’s Main Street Act, as well as the proposed Saving Our Street Act by Senator Kamala Harris (D-CA) and Congresswoman Ayanna Pressley (D-MA) to provide $124.5 billion to establish a Microbusiness Assistance Fund.

Earvin “Magic” Johnson partnered with the National Action Network and MBE Capital Partners to provide $100 million in loans to minority and women-owned businesses in urban communities through the existing Paycheck Protection Program (PPP).

Of the total $660 billion allocated as PPP funds, as of May 26 the Small Business Administration has approved $511 billion in loans with an average loan size of $115,713.

The House and Senate seem poised to pass a bipartisan bill that would relax the requirements of the Paycheck Protection Program so that the loans extended to businesses can be forgiven more easily.