Bankole: Stimulus package must provide for black businesses
Not only is the virus killing blacks at a higher rate, but it’s also decimating African American businesses, cultural institutions and colleges that are already no strangers to financial hardships. The impact of the virus on black entrepreneurs, who have historically faced unnecessary hurdles and discriminatory practices in securing financing and bank loans, could now further disadvantage them in the marketplace.
In the wake of the pandemic, black businesses will be in dire straits. The next congressional coronavirus stimulus package for small businesses must allocate meaningful funds to support job providers and other anchors in the black community.
“Black Americans are feeling the most severe economic and health impacts from the coronavirus pandemic, but are simultaneously failing to gain access to the relief deployed by the federal government,” says David Clunie, the head of the Black Economic Alliance. “Congress must counteract this reality by prescribing targeted solutions to overcome the persistent lack of access to financial resources for black people and institutions in America. Congress can determine the fate of millions of small businesses, universities and cultural institutions in the next round of stimulus funding. They must prioritize support for minority-owned businesses and ensure that Black workers and students have the resources they need to survive this pandemic.”
The Black Economic Alliance issued a set of recommendations on Monday as part of a report that details a set of policies for Congress to act on.
“Businesses in black communities are less likely to be served by large commercial banks that were the primary distributors of the small business stimulus and who favored their pre-existing customers,” the report stated. “However, only 78 of 950 Community Development Financial Institutions (CDFIs) are participating in the government program, according to the Treasury. Credit unions were also left out of initial applications because they could not activate the correct Small Business Administration credentials quickly enough. Congress allocated just $10 million to the Minority Business Development Agency (MBDA).”
Now the group wants the small business stimulus package to, “Allocate 35% of SBA funds to CDFIs and minority depository institutions in priority opportunity zones.”
Congress gave the Kennedy Center $25 million in the first round of the stimulus. The report notes that there are other significant African American cultural groups that should equally be deserving of financial support from the government. That includes the Schomburg Center for Research in Black Culture based in New York, which is regarded as the premier institution of research of black history in the nation, as well as the Smithsonian National Museum of African American History and Culture.
Michigan U.S. Sen. Gary Peters, D-Bloomfield Township, agrees. He says there’s “no question” of the disproportionate impact of the virus on the black community:
“That’s why we need to ensure African-American communities in particular have the resources to get through this,” Peters says. “I led the fight to increase funding dedicated for minority-owned businesses — and I’m pleased to have secured funding that passed the Senate this week for minority-owned businesses to have access to the resources to help stay afloat.”
The quest to save black businesses is also gaining attention in President Donald Trump’s party.
“Black-owned small businesses, all over our country are the cornerstone of community life and sources of great pride,” Republican Party leader Ronna McDaniel pens in a recent op-ed.
The virus has already had a deadly impact on the black community. Now we must prevent the loss of wealth through businesses that have sustained black neighborhoods. Congress must act.
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