Minority-owned companies waited months for loans, data shows

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AP Exclusive: Many minority-owned small businesses desperate for a coronavirus relief loan didn’t receive one until the Paycheck Protection Program's last few weeks. Many more white business owners were able to get loans earlier in the program.

FILE - In this June 5, 2020 file photo, President Donald Trump poses for a photo after signing the Paycheck Protection Program Flexibility Act during a news conference in the Rose Garden of the White House in Washington. Thousands of minority-owned small businesses were at the end of the line in the government’s coronavirus relief program as many struggled to find banks to accept their applications. Or, they were disadvantaged by the program's terms.

The program, which began April 3 and ended Aug. 8 and handed out 5.2 million loans worth $525 billion, helped many businesses stay on their feet during a period when government measures to control the coronavirus forced many to shut down or operate at a diminished capacity. But it struggled to meet its promise of aiding communities that historically haven’t gotten the help they needed.Congress has approved a third, $284 billion round of PPP loans.

That pattern reversed itself over the final four weeks of round two, partly because banks responded to criticism by making it easier to apply for a loan. Over the entire course of the program, the number of loans approved grew and evened out at 14 loans per 1,000 residents in the most ZIP codes with the most and fewest number of white-owned businesses.“Many are hanging on by the skin of their teeth.

The AP analysis shows restaurants slammed by the virus outbreak got the most loans in the first round, but they were followed by businesses in two high-income professions: law firms and doctors’ practices. When the first round ended millions of small businesses were left waiting.release found some of the nation’s largest banks had processed larger loans first. That included loans to well-known and well-financed companies including Shake Shack, Ruth’s Chris Steakhouse and the Los Angeles Lakers.

 

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