Black business owners were far less likely to get assistance from the Trump administration’s Paycheck Protection Program in the aftermath of the coronavirus shutdown.
President Donald Trump tried to win over Black voters Friday afternoon by promising to boost Black-owned small businesses and reduce criminal sentencing.
The president described his “Platinum Plan” as an initiative to support Black entrepreneurs and increase prosperity in Black communities. The economic plan aims to allocate $500 billion in capital for Black-owned businesses, Bloomberg News reported.
But this initiative is a stark contrast to Trump’s handling of the coronavirus pandemic and relief programs for small business owners. Several studies found Black business owners were treated worse and received far less assistance when applying for the Paycheck Protection Program (PPP), a forgivable loan to support small businesses during the pandemic, than their white counterparts.
A study from the National Community Reinvestment Coalition in May sent pairs of business owners to 32 bank branches from 17 financial institutions participating in the PPP. Each pair consisted of a Black borrower and a white borrower who shared identical credit history and asset characteristics. The sole difference between the borrowers was their race. The study found that out of the 17 financial institutions they visited, 13 had at least one test at a bank branch in which a white borrower was treated more favorably than their Black counterpart. It also found Black borrowers were “offered different products and treated significantly worse by employees” than their white counterparts in 43% of tests.
When it comes to receiving actual PPP assistance from lenders, the data shows a significant disparity between white business owners and Black and Hispanic business owners. In May, a national survey of 500 Black and Hispanic business owners found that only 12% received full assistance requested in their PPP application.
The racial inequality evident in COVID-19 relief programs has led to devastating consequences. Research from the University of California – Santa Cruz uncovered that the pandemic permanently shut down 41% of Black-owned businesses in the United States. In comparison, only 17% of white-owned companies have shuttered.
Trump is facing an uphill battle to make his case to Black voters. Polls frequently find that the majority of Black voters do not view Trump favorably. According to the Washington Post’s January poll, approximately 83% of Black Americans believe Trump is “racist” and has worsened racial tensions. Another poll found that only 10% of likely Black voters will cast their ballots for Trump. In comparison, the poll found 83% of Black Voters supporting Democratic nominee Joe Biden.