More so than other racial groups, Black-owned businesses have been trounced harder by COVID-19 and are still rebounding from the pandemic.
Yet, some uplifting news is they perhaps will be among those to benefit from a new plan by Vice President Kamala Harris and Treasury Secretary Janet Yellen to provide $8.7 billion in federal funding for financial institutions catering to minority and underserved small business owners.
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announcement was made Tuesday at the annual Freedman’s Bank Forum at the Treasury Department, per Yahoo Finance. The much-needed capital infusion is a piece of $12 billion gained last year by Harris. It came when she was a Senator and worked to get the funding with other senators, including Cory Booker, Chuck Schumer, and Rep. Maxine Waters, chairwoman of the House Financial Services Committee. The funding comes as the economic disruption caused by COVID has especially hit Black-owned businesses hard. Ownership rates for them fell 41% between February and April 2020. According to a U.S. House Small Business Committee report, that was the greatest decline of any racial group.Even more, some 53% of Black business owners have seen revenues fall by 50% or more since COVID-19 became a widespread concern, versus just 37% of white business owners. This year might not get rosier as 47% of small business owners are not optimistic about their success in 2021. Making matters worse, Black-owned businesses are 20% less likely than their white counterparts to get a loan from a large bank.
The nation’s first Black vice president, Harris, has reportedly worked with Secretary Yellen to apply funding for programs through Community Development Financial Institutions (CDFIs) and Minority Development Institutions (MDIs). The effort is aimed to help small business owners in underserved communities gain access to capital to launch or expand businesses.
“In America today, deep racial disparities continue to hold people back from achieving all they can,” Vice President Harris stated at the forum.