Nation’s poorest areas got billions less in PPP cash than richest, report finds
The amount of money each congressional district received in the form of the Small Business Administration’s Paycheck Protection Program (PPP) loans appears to have varied widely depending on the area’s wealth, a new report found.
The difference in dollar amount for the 10 poorest congressional districts versus the 10 richest was over $13 billion, according to the report from Accountable US. The 10 poorest districts received 56,000 fewer loans compared to the wealthiest, Accountable US found.
Black Americans were disproportionately impacted due to the demographic makeup of the poorest congressional districts, according to the report.
“The neediest districts had an average Black population of 41.8% while the wealthiest districts averaged 6.3% Black,” the report said.
The 10 poorest congressional districts are in New York, Kentucky, Michigan, Mississippi, Alabama, South Carolina, Florida, North Carolina, Arizona and Louisiana, according to the report. The 10 richest districts are California, Virginia, New York and New Jersey.
Most Black-owned small businesses are in service industries heavily impacted by the coronavirus pandemic such as food and retail, Reuters reported. Those companies “are expected to shutter at twice the rate of small businesses overall,” according to Reuters.
Accountable US’s report attributes the loan disparity to the government’s prioritization of businesses with more “resources and connections,” the report said. The watchdog group defines businesses with more resources as publicly-traded companies, according to Accountable US’s previous report from Aug. 19.
“As these companies cashed in, thousands of actual small businesses — particularly Black-owned and other minority-owned enterprises — were shut out of the program altogether,” the Aug. 19 report said. “And without new data from the SBA [Small Business Administration] since July 6, it’s unclear how many more large companies might’ve run away with the program’s limited pool of taxpayer dollars.”
Accountable US used Measure of America’s “Mapping America” data on median household income and a congressional district’s Black population percentage to determine the socio-economic and demographic findings, according to the report. The company did not include its margin of error.
The White House acknowledged the program’s flaws made it difficult for funding to reach Black businesses on a conference call with 700 “African American stakeholders, lenders, business owners and community leaders” in April, according to NBC.
This story was originally published August 26, 2020 at 6:57 PM with the headline "Nation’s poorest areas got billions less in PPP cash than richest, report finds."