Senators Cory Booker (D-NJ) and Ben Cardin (D-MD) have released a proposal to prevent underserved and small businesses from falling further behind during and after the coronavirus economic crisis.
The proposal described minorities, women, and those in rural areas as key drivers of job and productivity growth. However, those small businesses are also the least likely to survive the unprecedented economic hardships the coronavirus pandemic has brought.
“Failing to help these vulnerable small businesses runs the risk of extending this economic crisis while also limiting our economy’s ability to recover after we defeat COVID-19,” the proposal states.
The proposal calls for mandatory daily and weekly reporting on the total number and dollar amounts of loans or grants approved and disbursed through the Paycheck Protection Program (PPP). This includes the Emergency Economic Injury Disaster Loan (EIDL) Grants Program and the EIDL Program as well as the amount of remaining funding in each program.
Additionally, the proposal would create a threshold for Community Development Financial Institutions (CDFIs) and other mission-based, non-profit lenders still seeking approval to lend under PPP. The proposal will also set aside $10 billion for CDFIs with a proven record of reaching underserved borrowers and Minority Depository Institutions, or MDIs, to support loans to underserved small businesses.
Minorities, particularly African and Hispanic Americans are struggling to overcome the economic turmoil brought on by the coronavirus pandemic. African and Hispanic business owners have an added burden when considering their businesses’ financial future along with their personal finances.
Booker and Cardin have also made it a priority to help businesses owners who’ve had past legal issues. The proposal will allow businesses owned by individuals with felony convictions or who are on parole or probation access to PPP funds. Employers will also be given flexibility in choosing when to deploy PPP funds and to hire back their employees.
African American and minority businesses owners have expressed their frustrations in applying for PPP loans.
According to a national survey of 50 small businesses on PPP loans conducted by Creative Investment Research, out of the 60% of respondents who applied for the program, 33% got some level of funding. For the EIDL Program, of the 72% of the survey respondents who applied, 28% got some level of funding.
The senators’ proposal has been endorsed by National Urban League, National Action Network (NAN), Main Street Alliance, Small Business Majority, and the Black Economic Alliance.