KANSAS CITY, MO (KCTV) – New figures show that minority-owned businesses in the Kansas City area were less likely to benefit from the paycheck protection program.
The numbers are concerning to hear as the conversations about racial equity and justice continue. Data from the University of Missouri-Kansas City shows that less than 5% of minority-owned businesses in surrounding communities have received money from the program.
Out of 4,677 PPP loans in the region, only:
- 24 went to black-owned businesses
- 34 went to Hispanic-owned businesses
- 33 went to Asian companies
- 250 went to women-owned businesses
A study by the Center for Responsible Lending estimated that 90% of minority-owned businesses would not receive a PPP loan through a traditional bank or credit union.
The disproportionate number of black-owned business closures will lead to a disproportionate number of black unemployed. It’s because we know people hire people who are like them.
Some advocates say the program was structurally flawed in making banks middlemen, leaving struggling businesses at the mercy of the bank.
“We were turned down by 13 different banks before we even opened in the first place and we didn’t stop there to say that we wouldn’t have survived without it’s difficult because we would have done all we could. Maybe it was personal credit, loans from family members to keep the business afloat, but now is not the time when we want to get into more debt, ”said Alicia Yahaya, owner of Open Minds. Child Development Center.
The closure of more minority-owned businesses leads to increased unemployment in minority communities. It also widens the racial wealth gap.