Three weeks ago, the Federal Government created the Paycheck Protection Program (PPP) with over $249 Billion in available funding. Congress intended that the administration use these funds to help the approximately 30 million small businesses with fewer than 500 employees pay their employees and keep their payrolls intact. When all was said and done, however, only 1.6 million of those deserving small businesses were able to access this money. Instead, hundreds of millions of dollars went to large restaurant chains and publicly-traded companies with thousands of employees and ready access to capital markets.
Legions of small businesses throughout Los Angeles and across the country have been trying to access these funds to no avail. In the meantime, the COVID-19 pandemic continues to decimate small mom-and-pop businesses like our barbershops, beauty salons, and restaurants.
We have listened to your stories, and we took action. The National Urban League, with more than 90 affiliate offices across the country, demanded that Congress pass a new legislative package directed specifically at legitimate small businesses. Many of these businesses are minority-owned, rural, remote, and unbanked small companies that don’t have access to other resources. Yet, they are critical to the functioning of our economy and are on the front lines of the COVID-19 pandemic. The Urban League demanded that Congress give these businesses top priority and expand the types of financial institutions that participate in the program to include community-based financial institutions.
This week, Congress passed a relief package that included an additional $310 billion for the PPP and many of the reforms that the Urban League demanded. The legislation includes $60 billion that will be allocated through small and mid-sized banks and credit unions as well as community-based lending institutions. These lenders include Community Development Financial Institutions (CDFIs), Minority Depository Institutions, SBA microlenders, and certified development companies/SBA 504 lenders, as well as small credit unions and community banks. These lenders have a long track record of expanding access to capital for underserved businesses.
The fight is not over. We will continue to advocate for minority-owned small businesses. Through our national offices, we will continue to urge Congress to distribute these funds based on need and not relationships that favor larger clients.
Please help us continue the fight for fairness and equity in the face of the coronavirus crisis.
With you in the movement,
President and CEO
Los Angeles Urban League