A new national survey of African American small businesses was conducted by Washington, D.C.-based Creative Investment Research. The survey asked questions about the Paycheck Protection Program and the Economic Injury Disaster Loan Emergency Advance (EIDL) Programs. The survey was intended to get a true pulse of how effective the lending programs have been. Sixty four percent (64%) of survey participants that said they applied for the Paycheck Protection Program (PPP), only 19% got funding. Even those receiving funding, however, got far less than what they asked for or expected. As survey respondents were predominantly Black businesses, this gives us some insight as to why unemployment is high and growing among Black Americans.
What can Black people do immediately?
- Apply for the stimulus check of $1,200 - 100% probability rate of receiving;
- Apply for Paycheck Protection Program (PPP) - much lower probability rate of receiving PPP, only about 19% received funding per survey results. Services to help you apply:
- Lendio - committed to trying to get capital to black, women and minority companies
- Apply for the Economic Injury Disaster Loan (EIDL)
- Identify internal resources. Caucusing with your network to ask for money (loan pool). Look to your family for financial support and guidance.
- Health (95%). This is because: lack of top-level hospitals in communities of color, gentrification;
- Employment (85%) - We estimate Black unemployment will hit 50% at peak. This is because Black people are the last hired, first fired. A lot of black Americans work in the service industry, which has been one of the hardest hit by the pandemic;
- Education (70%) - The best opportunity to fix this issue is through more equitable and creative educational opportunities;
- Homeownership (50%) - We suggest that the Fed engage with Fannie Mae and Freddie Mac to create mortgage-backed securities (MBS) to help Black homebuyers;
- Small Businesses (40%) - Lower than expected impact since Black business owners are equipped with better survival skills.