In March, Congress passed federal stimulus and relief funding to help families and businesses weather the global health crisis and the economic shutdown. The federal relief included the Paycheck Protection Program (PPP), which delivered more than 5 million loans amounting to more than $525 billion.
Robert F. Smith, Founder, Chairman and CEO of Vista Equity Partners, called out the PPP program early on for leaving too many Black-owned businesses behind.
Now, a new report from the House Congressional Oversight Committee concludes that the Treasury Department privately encouraged banks to prioritize their existing customers when processing PPP loans. This means that Black business owners were put at a disadvantage since they are less likely to have an existing role with traditional lenders. In fact, 70 percent of Black communities don’t have a bank branch of any kind, according to Smith. This disparity meant thousands of Black-owned businesses weren’t able to get the essential help they needed and too many were forced to shutter.
To correct this inequity and help our Black businesses recover, Smith has called for all new federal stimulus funding to ensure capital is reaching communities that need it most — particularly Black business owners — and to leverage the national network of Capital Development Financial Institutions (CDFIs) that have better relationships and presence in communities of color.
Read more about Smith’s efforts to make COVID-19 relief more equitable.
Menu
Menu
