Billions in Funds Unused as PPP Expires, Underscoring Failed Rollout and Mismanagement of Relief Program
WASHINGTON, D.C. – The Paycheck Protection Program (PPP) is set to expire at close of business today with a remaining $140 billion of assistance still unclaimed as many small businesses struggle to stay afloat. The administration’s botched rollout of the PPP has barred many small businesses owners from accessing the funds they need: Black, Latinx, and other business owners from underserved communities were disproportionately disadvantaged in the application process, and business owners with criminal records were only granted access to the program days before its expiration — likely denying them access to desperately-needed funds — all while wealthy, well-connected, and publicly-traded corporations spent weeks cashing in.
“That thousands of small businesses have been forced to shutter while there’s still $140 billion available in federal assistance is an indictment of the administration’s flawed, biased execution of the Paycheck Protection Program,” said Kyle Herrig, president of Accountable.US. “Mom-and-pop businesses still need support. Black and Latinx business owners still need support. Yet the Trump administration has so poorly managed the rollout and execution of the PPP that months into the program, businesses most in need of funds still aren’t able to access them.”
Herrig continued, “Any future relief programs must be structured to actually serve those most in need, while providing the public with the transparency they deserve.”
Here are a few of the PPP’s greatest failures that could have been prevented:
- Research from the University of California at Santa Cruz found that 440,000 Black-owned businesses shuttered from February to mid-April 2020 — a decrease of 41 percent.
- According to a report by the Center for Responsible Lending, approximately 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 stood close to no chance of having access to credit from PPP when the program first started because of the program’s poor design.
- In May, one survey found that only 12 percent of Black and Latino businesses that applied for aid through the Small Business Administration (SBA) received the aid they asked for, while another 26 percent said they received a fraction of their request.