Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Black-Owned Businesses Received Less Than 2% of PPP Loans, White-Owned Got 83%

moguldom.com

Post reply on HN
Print view View original

21–30 of 61 posts

Re: Black-Owned Businesses Received Less Than 2% of PPP Loans, White-Owned Got 83%

#21

Post by screye »

For context :

Blacks own about 2.6 million businesses or 9.5 percent of all U.S. businesses

The 19 million white-owned businesses have 88 percent of the overall sales, and control 86.5 percent of U.S. employment, while black businesses have a mere 1.3 percent of total American sales, and 1.7 percent of the nation’s employees.

___

The article doesn't clarify if by percent they mean number of loan applications approved or % of loan funding allocated.

If it the former, then black businesses have received far fewer loans than their representative amount. If it is by revenue, then it is actually inline with the ir representation in population.

___

> Monday shows that of the 14 percent of businesses that chose to identify race in their loan application, Black-owned businesses received 1.9 percent of loans while White-owned businesses received 83 percent.

Might be interesting to see if this trend held when black owners did not identify themselves.

Re: Black-Owned Businesses Received Less Than 2% of PPP Loans, White-Owned Got 83%

#22

Post by Auracle »

krisroadruck wrote: post #18
nickff wrote: post #4

According to the US Census Bureau, 9.4% of businesses were black-owned, as of 2012. According to the same report, 78% of businesses were white-owned in 2012. https://www.census.gov/newsroom/press-releases/2015/cb15-209...

For the purpose of PPP we need to narrow down to the businesses that have paid employees. Over 95% of black owned businesses do not according to the 2012 SBO Census. Edit: More data - "Data from the Small Business Administration indicates that just over 19 million businesses, or 70.9 percent of all U.S. businesses, are white-owned. Blacks own about 2.6 million businesses or 9.5 percent of all U.S. businesses, and Lat…

You can use the PPP to pay yourself as well.

That said for me it didn’t seem worth it, as I wouldn’t get unemployment during that time - and if I somehow screwed up it would mean I’d need to repay it. No chance of that on unemployment.

Re: Black-Owned Businesses Received Less Than 2% of PPP Loans, White-Owned Got 83%

#23

Post by ewzimm »

TAForObvReasons wrote: post #20
ewzimm wrote: post #17

Earlier quoted context omitted.

I think the most useful comparison would be to judge it against expenses, since not all businesses would need the same amount of loans. The closest related statistic I could find is that all minority-owned businesses generate around 3% of revenue. The loans seem to have been given out fairly evenly as intended, but the small impact of black businesses on the economy seems like a much more significant disparity. https…

So that raises its own set of interesting questions that hits at the core of the issues that the article discusses: why is it the case that 9.4% of businesses are black-owned yet only generate 3% of revenue? Are there issues with, say, obtaining a loan? Do they face challenges to growth that white-owned businesses do not? When fixated on the statistics, it's easy to forget the human questions around the disparity.

Absolutely, and that 3% is for all minority-owned businesses, not just black-owned. One large part of the problem is likely that the higher revenue industries are dominated by big businesses that shut out small businesses. Here’s an industry breakdown showing a very small representation in industries like information.

https://blackdemographics.com/economics/black-owned-business...

Re: Black-Owned Businesses Received Less Than 2% of PPP Loans, White-Owned Got 83%

#24

Post by danielfoster »

ceejayoz wrote: post #9
macspoofing wrote: post #2

If you're going to put together an inflammatory article the least you could do is dive a little deeper and answer the 'Why' question. Why did black-owned businesses receive less than 2% of PPP Loans?

It doesn't take that much guessing. https://www.nytimes.com/2020/04/10/business/minority-busines... > Racial discrimination in banking is outlawed on paper, but it continues in practice — often in subtle forms. In 2018, for instance, the National Community Reinvestment Coalition, a nonprofit organization that works with banks to increase the flow of private capital into poor and underserved communities, sent “mystery…

Discrimination in lending exists, but at least with PPP loans, there was no in-person consultation. For many businesses it was just an online application.

It probably does hold true though that white businesspeople may have better relationships with their bankers, resulting in faster loan processing.

Re: Black-Owned Businesses Received Less Than 2% of PPP Loans, White-Owned Got 83%

#25

Post by ceejayoz »

danielfoster wrote: post #24
ceejayoz wrote: post #9

Earlier quoted context omitted.

It doesn't take that much guessing. https://www.nytimes.com/2020/04/10/business/minority-busines... > Racial discrimination in banking is outlawed on paper, but it continues in practice — often in subtle forms. In 2018, for instance, the National Community Reinvestment Coalition, a nonprofit organization that works with banks to increase the flow of private capital into poor and underserved communities, sent “mystery…

Discrimination in lending exists, but at least with PPP loans, there was no in-person consultation. For many businesses it was just an online application. It probably does hold true though that white businesspeople may have better relationships with their bankers, resulting in faster loan processing.

Many lenders required an existing relationship. Disparities in access to banking will absolutely reflect in access to PPP loans.

Re: Black-Owned Businesses Received Less Than 2% of PPP Loans, White-Owned Got 83%

#26

Post by ugwigr »

macspoofing wrote: post #2

If you're going to put together an inflammatory article the least you could do is dive a little deeper and answer the 'Why' question. Why did black-owned businesses receive less than 2% of PPP Loans?

I wrote the article - I don't think it is inflamatory. It is irrelevant if 0% of business owners are Black. The US Treasury (which controls the IRS, money printing and funds the government) should not abuse its power to favor a certain segment of the population. The government should not bail out private companies.

Re: Black-Owned Businesses Received Less Than 2% of PPP Loans, White-Owned Got 83%

#27

Post by aSplash0fDerp »

dpbriggs wrote: post #8

In other news, larger corporations are more white-owned, and had the resources to wrangle the PPP loans. This is a case of small businesses not having the resources to acquire the loans in the first place. Mixing in race obfuscates and distracts from the real issue here. It should have been easier for small businesses and harder for larger ones to balance the scales.

We actually have a snapshot on Youtube of personal wealth channels promoting PPP and EIDL during that window.

You can see exactly who was stepping up with quality information and even sort/poll by race if thats your thing.

It was being promoted as free money by some and many offered solid strategies for small businesses to make the 2nd cut and skip the lines.

Re: Black-Owned Businesses Received Less Than 2% of PPP Loans, White-Owned Got 83%

#28

Post by ugwigr »

dpbriggs wrote: post #8

In other news, larger corporations are more white-owned, and had the resources to wrangle the PPP loans. This is a case of small businesses not having the resources to acquire the loans in the first place. Mixing in race obfuscates and distracts from the real issue here. It should have been easier for small businesses and harder for larger ones to balance the scales.

I acknowledge there are other issues but I wanted to shed light on an issue (racial issues) I care about. Even if larger corporations are more white-owned it is worth noting the US Treasury is transferring wealth to White people

Re: Black-Owned Businesses Received Less Than 2% of PPP Loans, White-Owned Got 83%

#29

Post by ugwigr »

krisroadruck wrote: post #12

What percentage of businesses with paid employees are black owned? Without this bit of data, the rest doesn't have any context.

In my opinion, it does not matter if 0.1% of companies are Black-owned. In my article, I am not looking to establish intent. I am just showing what is effectively happening and for that the percentage you asked about is irrelevant.

Re: Black-Owned Businesses Received Less Than 2% of PPP Loans, White-Owned Got 83%

#30

Post by ugwigr »

Ghjklov wrote: post #5

Maybe there are fewer black-owned businesses than white-owned ones.

In my article, I am not looking to establish intent. I am just showing what is effectively happening and therefore to make my point it does not matter at all where fewer companies are Black-owned
Post reply on HN