Senators Duckworth and Markey Introduce New Legislation to Ensure Paycheck Protection Program Reaches More Small Businesses of Color
Bill would appropriate funding for community financial institutions, require data reporting on loans made under PPP, and provide funding and technical assistance to these lenders
[WASHINGTON, DC] – Today, U.S. Senators Tammy Duckworth (D-IL) and Ed Markey (D-MA), members of the Small Business and & Entrepreneurship Committee, announced legislation to appropriate Paycheck Protection Program (PPP) funding better targeted towards small businesses of color. Minority-owned small businesses have been disproportionally shut out from the existing PPP due to a lack of existing banking relationships and needs for smaller loan amounts. The lack of SBA data on demographics for loan disbursements has made this problem difficult to quantify.
“Minority small business owners have been largely shut out from accessing the Paycheck Protection Program, in many cases because they lack pre-existing relationships with large banks,” said Senator Duckworth. “I’m proud to be introducing this important legislation with Senator Markey that builds off of the provisions Senate Democrats secured in the most recent bipartisan COVID-19 relief package by increasing access to capital for minority small business owners and addressing SBA’s failure to track PPP borrower demographics.”
“The coronavirus crisis has shined a light on the racism and inequalities in our economy and society that existed before this virus spread. We are seeing that disparity in relief getting to our small businesses, and we cannot allow that discrimination and those inequalities to continue.” said Senator Markey. “I am proud to join with Senator Duckworth on legislation to correct some of these problems and provide equitable access and much needed accountability to the Paycheck Protection Program.”
A copy of the legislation can be found HERE.
According the Center for Responsible Lending, as of early April, 95 percent of black-owned businesses, 91 percent of Latino-owned businesses, 91 percent of Native Hawaiian or Pacific Islander-owned businesses, and 75 percent of Asian-owned businesses were unlikely to receive PPP funding through larger banks or credit unions.
Specifically, the legislation:
- Appropriates $10 billion in the PPP specifically for Community Development Financial Institutions (CDFI) and Minority Depository Institutions (MDI)
- Ensures that $5 billion of that funding remains for loans of less than $150,000
- Further ensures that $2.5 billion of those funds are for loans of less than $75,000
- Deems all certified CDFIs as lenders under PPP
- Creates a $100 million grant program to provide technical and management assistance for MDIs and CDFIs originating smaller loans averaging less than $50,000
- Requires reporting by the SBA within 7 days, including data on gender, race, ethnicity, sex, age, Tribal affiliation, socioeconomic status, and disability status of each eligible loan recipient.
- Appropriates $1 billion in emergency funding to the CDFI fund
- Extends the Paycheck Protection Program through December 31, 2020
- Extends the loan forgiveness period for PPP loans to 24 weeks
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