Black-owned businesses got shortchanged from the Paycheck Protection Program (PPP).
A new study from a Washington, D.C. watchdog group shows the top ten congressional districts with the highest black populations received the least amount of PPP loan funding compared to congressional districts with the lowest percentage of black residents.
In the study, Tennessee’s 9th Congressional District which includes Memphis was number one on this list of disparities.
The study shows the disparity isn’t just in the number of PPP loans received in districtS with higher black populations. The data shows these same districts also received loans that were worth less money.
Trap Fusion in Whitehaven is one of 39,000 black-owned businesses in the Memphis area.
Co-owner Jason Gardner told FOX13 they didn’t get a $7,000 Paycheck Protection Program loan until the second round of funding.
“It paid payroll for us for a couple of weeks,” co-owner Jason Gardner said.
A new study from Accountable.US shows the top ten congressional districts with the highest percentage of black residents received $12.9 billion less in PPP loan funds than the ten districts with the lowest percentage of black residents.
“We work just as hard as anybody else so we should be seen as equal and we should be on the same playing field as everyone else when it comes to funding and grants and things of that nature,” Gardner said.
FOX13 compared Tennessee’s 9th Congressional District which includes Memphis to Wisconsin’s 7th District because the overall populations are almost the same at more than 71,000 people.
This is how the black population breaks down between the two districts:
Tennessee’s district is more than 67 percent black and Wisconsin’s district is less than one percent.
FOX13 looked at how many PPP loans each district received.
There were more than 4,800 loans issued in Tennessee’s 9th Congressional District but more than double the amount in Wisconsin’s 7th Congressional District with 10,609 total loans.
“The program was designed in such a way that it left black communities behind, it left black businesses behind and the SBA under Trump had the opportunity to correct this several times along the way. There was more than one round of PPP funding and they didn’t,” said Accountable.US President Kyle Herrig.
The study also shows disparities in the PPP loan amounts.
In Western Tennessee, only 47 businesses received loans worth $2-10 million while 750 companies received loans worth $150,000 or less.
The Black Business Association of Memphis said the results of this study aren’t surprising, but President Mark Yates said banks aren’t all to blame for the disparity. He said it’s bigger than that.
“It’s how is the overall system set up to be a safety net economically and financially for everyday working Americans,” said Yate. “I mean who are people who are doing their business may be operating on a cash basis and they are reporting but you know it just revealed a huge gaping hole and we’re at the bottom of that hole in this community.”
Several community development agencies like the EDGE Board have been offering need-based grants for small businesses.
So far this year, EDGE NEED Grant has provided $584,200 to 103 businesses throughout Memphis' distressed neighborhoods and they estimate about 60 percent of them are to black-owned businesses.
In response to the study, Congressman Steve Cohen who represents Tennessee’s 9th Congressional District sent a letter to House leadership urging that the next COVID-19 stimulus package mandates PPP lenders to prioritize minority-owned businesses.
Cox Media Group