b"PANDEMICWithout More Help, Black-Owned Businesses Might Not Survive the PandemicBy Eugene Cornelius, Jr. from TriceEdneyWire.comB lackcommunitiesintheUnited Statesnotonlyrepresentadis-proportionateshareofcasualties from coronavirus, but they have also been deeply affected by the economic impactofthedisease.Longstanding racial discrimination in economic and housing policy has increased their risk for exposure to the virus, as well as the resulting financial crisis.Theeconomiceffectsofthepan-demiconBlackcommunitiescanbe explainedbyseveralfactors.Almost halfofBlack-ownedbusinessesare in industries - such as administrativeWecanbeginbytakingthreekey and support services, health care andsteps:social assistance and retail - that are bearingthebruntofthispandemic.1. First, federal and state governments These industries not only pose a healthshould enact robust credit enhance-risk because of the interaction betweenment programs for minority borrow-workers and customers, but they areers. These programs provide incen-also especially vulnerable to lower con- tives for banks to lend to businesses sumer demand due to social distanc- inlow-andmiddle-incomeareas, ing measures. allowing more firms to remain open Over 90 percent of small business- andrefrainfromlayingoffwork-esinmajorityBlackcommunitiesers. In states with existing loan pro-holdcashreservesoffewerthan14grams that provide credit enhance-days,sotheyaremorelikelytorunment, treasury officials should make out of operating funds when customersloans more flexible, easier to access stay at home. And the most recentlyandincreaseloanguarantees.In available Federal Reserve data showsothers,wherecreditenhancement that Black business owners are deniedprograms do not yet exist, treasury loans at twice the rate of white own- officialsshouldcreatelossreserve ers,sotheyaremorelikelytohavefunds and collateral support mecha-troublefindingcapitaltosurvivethenisms, as well as a marketplace to pandemic. pair pre-qualified lenders with bor-In the face of large-scale shutdownsrowersinneedofworkingcapital. caused by the COVID-19 crisis, thereStategovernmentscanalsoautho-is a clear need for policies to supportrize one-to-one matches for philan-small business. But the spending pro- thropic funding to expand the pool of gramspassedbyCongressthusfaravailable capital.have ignored the challenges of capital2. Second,creditenhancementpro-access facing Black-owned firms. grams should also be used to sup-Duringthefirstroundoffundingportplace-basedinvestment,with providedforsmallbusinesses,bor- apriorityonhousingandinfra-rowersseekingPaycheckProtectionstructureinlow-incomeareas.For Program loans were required to workexample, officials can increase loan with banks already participating in theguaranteestosupportconstruction USSmallBusinessAdministration'sofhousingforindividualsearning (SBA)primaryloanprogram,there- from80percentto200percentof byexcludingfirmsthatworkedwiththe local average median income, or smallercommunitybanks.Moreover,offerspecialcollateralguarantees Congress allocated just $10 million tofor minority-owned businesses with theMinorityBusinessDevelopmentrevenues under $5 million to invest Agency.AccordingtotheCenterforin long-term assets.Responsible Lending, these conditions3. Third,place-basedinvestments mayhaveprevented95percentofshouldemphasizeenvironmental Black-ownedbusinessesfromreceiv- qualityinlow-incomeandminority ing loans. communitiesthroughspecialsup-Thesecondroundofsmallbusi- port for projects with higher air and ness funding assistance specifically setwaterqualitystandards-including aside $60 billion for community bankstheremediationofoutdatedwater and credit unions that are traditionallyinfrastructure.Usingfederaland akeysourceofcapitalforminority- state loan guarantees to fund these ownedfirms.However,themeasureinvestmentswillsimultaneously did not stipulate that minority-ownedsupport improvements to the health businesses would have priority accessof minority populations and reduce to those funds. theirvulnerabilitytofuturehealth Addressing these short-term lendingcrises.gaps is crucial to ensuring that Black- Aswelookbeyondthepandemic, owned businesses will stay in businessthesestepsarecrucialforensuring long enough to survive the pandemic.theAmericandreamiswithinreach But we must also plan for a long-termofminoritiesacrossthecountry.By recoverythatemphasizesinclusion.addressingfundamentalinequitiesin This will require us to remove historicoureconomicsystem,wecanbegin inequitiesthroughtargetedsupportto pave a new avenue toward a more for Black-owned businesses and Blackprosperous future.workers.BODY OF CHRIST NEWS MAY 2020 15"