Columnists Earl Ofari Hutchinson Opinion

THE HUTCHINSON REPORT: Congress needs to show black businesses the money

The figure has been cited often since President Donald Trump and Congress passed the COVID-19 stimulus relief packages. Ninety percent of minority businesses did not get a nickel of money from the Small Business Administration’s Payroll Protection Program.

For black-owned businesses, the number is even worse: 95% got no funding.

In several informal polls on my Facebook pages I asked the same question: “Do you know of any black owned business that got a COVID-19 stimulus SBA Payroll Protection Program Loan?” There were a handful of yeses. There was an avalanche of nos.

Some expressed optimism that the grim shutoff of the money spigot to black businesses might change with the House passage of an added $3 trillion stimulus package. However, the hope was guarded.

Trump, congressional leaders and treasury officials loudly pledged that small businesses were a prime target of the aid program. There was a litany of much-publicized online workshops and town halls on where and how to apply for funding.

Many banks announced that they had funds and encouraged businesses to apply. House Democrats sweetened the pot by prying $60 billion out of the loan package for minority banks. Yet, the number of black businesspersons who got money has barely budged.

There is much finger pointing at the SBA, treasury officials, corporate and bank lobbyists for lax to non-existent oversight, lax rules on who could get the money and for earmarking far too much of the half trillion business in loans to major corporations.

There is equally justified finger-pointing at the banks for tossing up a mountain of paperwork, tax and business filing documents and account requirements that small business owners had little chance of hurdling.

Then there was the muddle, confusion, and constant changing edicts about what and how the money could be used and what, if any of it, had to be paid back.

Little has changed except the desperation of countless numbers of distressed small black business owners. Overall, the estimated 2.5 million black-owned businesses make up almost one-third of the eight million minority-owned businesses in the United States.

The clock is ticking on the future survival of these businesses. There is still no clear timetable in many states, counties and cities for when the shelter in rule will end. Even then there is no guarantee that the businesses will be able to quickly open their doors, and when they do that their customers will be back.

Many have already closed their doors. More than 100,000 small businesses in early May had reportedly permanently closed their doors.

Almost certainly, a significant number of them were black-owned businesses. The worst-case estimate is that one-fourth to one-third of black businesses could go under without dramatic and fast financial intervention from government agencies.

That means flipping the script on what is considered a “priority” business. The label has been almost uniformly slapped on major businesses.

Wells Fargo virtually confirmed that in a memo that flatly said that it “prioritized” loans to its biggest and supposedly best customers, namely the major firms. It took much heat for its candor and in quick damage control said it would donate the hefty lending fees it raked into nonprofits. At least that is what it said.

Black businesses have long been a specially endangered breed when it came to getting a dime out of banks and the government. The reasons are well documented, the lack of credit, a proven business track record, resources, expertise and a long-standing cozy business connection and relationship with the banks.

Then there is the dizzying gauntlet of wage and tax forms, documents and filings needed to qualify for a loan. Much of the work is done online and that means having a computer, computer access and computer skills to go through the cyber paperwork required.

Countless surveys by business groups, federal regulators, and watchdog groups have produced reams of figures to show that despite the lip service lenders pay to wanting to loan to small businesses, the paltry number of loans they make annually to small, and especially minority businesses have remained frozen over the past decade.

Black businesses have been a needed engine for employment, wealth building and financial security for many blacks. They have served as showpieces for black financial and economic achievement and independence. They have spurred generations to pursue the oft-touted American dream of entrepreneurship and the means to be your own boss.

The colossal failure of COVID-19 relief packages to make the survival of black and minority businesses the priority has been yet another monumental COVID-19 tragedy. Time is running out for many black businesses. It’s time to show them the money.

Earl Ofari Hutchinson is an author and political analyst. He is the author of COVID POLITICS—Trump’s Deadly Game” (Amazon). He also is a weekly co-host of the Al Sharpton Show on Radio One and the host of the weekly Hutchinson Report on KPFK 90.7 FM Los Angeles and the Pacifica Network.