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Sunday, October 18, 2020

Black businesses get fewer loan opportunities, study shows

In 2019, only 3% of the $23.2 billion in loans from the SBA went to Black businesses

There has been an 84% national decline in lending money to Black-owned businesses since 2007 under the Small Business Administration’s small business lending program.

Read More: Black-owned businesses see sales boost from Blackout Day

In Sacramento, white businesses have received more money for their businesses than all Black businesses nationally from the SBA program, Census data showed.

According to the Sacramento Business Journal, a majority-Black census shows that Black businesses nationally received $157.58 per capita in business loans compared to majority-white businesses which received $304.59 per capita in Sacramento alone.

Business owners in white neighborhoods received $254.67 per capita, whereas neighborhoods with majority people of color received $153.72 per capita.

The problem is not exclusive to California, with states like Ohio facing similar issues.

In the County of Cuyahoga, where 1,439 federal small business loans were awarded in 2018, white businesses received $366 per resident whereas Black businesses received $182 per resident.

The four biggest banks – Chase, Bank of America, CitiBank and Wells Fargo – gave a total of 334 loans to Black-owned businesses in 2019, a 91% decrease compared to 2007, according to the Clevend Business Journal.

Read More: Black-owned OneUnited Bank gets boost after protests

In 2019, only 3% of the $23.2 billion in loans from the SBA went towards Black businesses.

While some might blame bad lending disparities on economic inequality, banks are saying one’s credit determines a person’s ability to get loans and credit issues are rampant in Black communities.

Critics of this data say that using the year before the Great Recession makes the data seem worse. 2007 was a time when getting a loan was very easy to do.

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The post Black businesses get fewer loan opportunities, study shows appeared first on TheGrio.



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