Urban League Helps Minority Owned Businesses and Community Institutions Access COVID Relief

The $349 billion Paycheck Protection Program established by Congress earlier this month was supposed to help sustain small businesses imperiled by the COVID-19 pandemic.

The money ran out in less than two weeks.

Then we found out  that the vast majority of the funding — $243.4 million – went to huge, publicly-traded companies instead of legitimate small businesses. 

Some of the companies are valued at more than $100 million, have millions in cash on hand, and – unlike the legitimate small businesses who didn’t see a dime of the funding – have easy access to other revenue sources. Fiesta Restaurant Group, which received a $10 million loan, owns the Taco Cabana and Pollo Tropical chains and operates more than 300 restaurants. The company saw more than $660 million in sales last year.  The most highly-valued company, Shake Shack, is worth $1.6 billion. Following backlash, Shake Shack returned the $10 million it received.

Determined to get funding to legitimate small businesses, the National Urban League advocated relentlessly to make sure the next relief package included targeted relief for the neighborhood-based businesses that have been the hardest-hit by the crisis.

While our efforts have met with some success, much remains to be done.

Our work with Congress resulted in the inclusion of dedicated funding for Small Business Administration Disaster Loans and Grants and for community-based lenders.

There is no question that the aid package that Congress passed this week was much enhanced by the provisions for which we advocated so strenuously. Our movement pushed relentlessly for these dedicated funding pools. 

I’m especially grateful for the efforts of Senators Chuck Schumer, Sherrod Brown, Chris Van Hollen, Ben Cardin and Cory Booker.  We urge immediate passage in the House and appreciate the work of Speaker Nancy Pelosi and Representatives Karen Bass, Maxine Waters and Nydia Velazquez.

The legislation includes:

• $60 Billion Set-aside for Smaller Lenders: A $60 billion set-aside within PPP for small and mid-sized banks and credit unions as well as community-based lending institutions. Most importantly, this set-aside funding will help ensure that unbanked and underserved businesses can get access to PPP. This includes minority-owned businesses, rural businesses, small mom and pop businesses, and smaller nonprofits that too often have been pushed to the back of the line in the program.

• $60 billion for SBA’s Economic Injury Disaster Loan and Emergency Economic Injury Disaster Grant program. These emergency programs provide flexible assistance to small businesses to cover operating expenses, including payroll and fixed costs like rent and utilities. These programs had been depleted by the demand created by COVID-19.