By Senator Lena C. Taylor
Under the CARES Act, the federal government allocated $349 billion dollars to assist small businesses struggling to stay afloat during the COVID-19 pandemic. Many folks assumed that millions of businesses could be helped with that kind of money. We quickly found out that we were wrong. The Paycheck Protection Program (PPP) ran out of funding in two weeks! Forbes Magazine reported that around 1.6 million small business owners received loans. However, that only represents 6% of America’s small businesses.
So, there are a few questions that immediately come to mind. How did Wisconsin fair? How did Milwaukee businesses make out? What percentage of the PPP dollars in the state went to black-owned businesses?
Wisconsin businesses actually didn’t do too bad, from what we’ve heard. We secured roughly $8 billion in loans, which was the 10th-highest sum in the U.S. Between 30-40 thousand Wisconsin companies were approved for loans. While I am working to get the demographic breakdown on the initial loans, some disturbing information began to emerge from black owned businesses in the state. We have heard that some of the loans in the black community were as small as $200. On the other hand, we watched large national chain restaurants secure multi-million-dollar loans.
Ruth’s Chris Steakhouse received $20 million, Shake Shack received $10 million, and other larger companies followed suit. Although the PPP program had a $10 million dollar loan limit per company, organizations were able to apply through multiple subsidiaries if each location had less than 500 employees. Loopholes, preferential treatment, and in some cases, greed edged many of the small businesses out of getting the help they desperately needed. Public pressure has caused some of the big businesses to return the money, including Ruth’s Chris and Shake Shack.
Understanding that more needed to be done, Congress has approved another round of PPP funding as of Thursday. An additional $310 billion dollars is going to be infused into the program. Just $60 billion was set aside to assist small lenders and community-based financial institutions. These are the places that minority and black-owned companies typically get financing for their businesses. I join federal legislators like Sen. Kamala Harris (D-CA) who called for data transparency to ensure that businesses of color are being shut out of these loans. For many Americans, these loans will be all that businesses have to help them hang on through the pandemic. Businesses of color employ more than 8.7 million Americans and contribute over $1.38 trillion dollars to the overall economy. We need to ensure that they have a fair chance at survival.