KANSAS CITY, MO (KCTV) -- New numbers show minority-owned businesses in the Kansas City region were less likely to benefit from the Paycheck Protection Program.
The numbers are concerning to hear as conversations about racial equity and justice continue. Data from the University of Missouri-Kansas City shows less than five percent of minority-owned businesses in surrounding communities received money from the program.
Out of 4,677 PPP loans in the region, only:
- 24 went to Black-owned firms
- 34 went to Hispanic-owned firms
- 33 went to Asian-owned firms
- 250 went to women-owned firms
A study from the Center for Responsible Lending estimated that 90% of minority owned businesses would not receive a PPP loan through a mainstream bank or credit union.
The disproportionate number of black-owned businesses closing will lead to a disproportionate number of black people unemployed. That’s because we know people hire people who look like them.
Some advocates say the program was structurally flawed by making banks the middlemen, leaving businesses who were struggling at the bank’s mercy.
“We were denied by 13 different banks before we even opened in the first place and we didn't stop there so to say that we wouldn't have survived without it is hard because we would’ve done everything we could have. It may have been personal credit, it may have been loans from family members to keep the business afloat, but this is not the time when we would want to go into more debt,” said Alicia Yahaya, owner of Open Minds Child Development Center.
When more minority-owned businesses shut down, this leads to higher unemployment in minority communities. It also widens the racial wealth gap.