Corporate Leaders Suggest Bailout for Minority and Women Businesses

July 10, 2020 by Tom Ramstack
Corporate Leaders Suggest Bailout for Minority and Women Businesses
Ron Busby

WASHINGTON – Business leaders, during a congressional hearing Thursday, advocated for greater access to financial services for minority and women-owned businesses.

They said government bailout money and low-interest loans for businesses during the COVID-19 pandemic are going first to established corporations that lack large representation by minorities and women.

As a result, about half the businesses owned by ethnic minorities or women are in danger of failing if they do not get assistance soon, according to witnesses at a House Financial Services subcommittee hearing.

“While the nation lost 3.3 million small businesses in the first and second quarter of the year, the number of Black enterprises declined 41%, Latino firms dropped 32%, Asian businesses dropped by 26% and women-owned businesses declined a quarter,” said Ron Busby, president of the U.S. Black Chambers, Inc.

African Americans, Latinos, Asians and women tend to be concentrated in what he called “high-impact Industries,” such as hospitality, food services, retail and personal care.

“They were already in a weaker financial position,” Busby said. “The advent of the pandemic exacerbated the challenges.”

He described the federal government’s primary recovery program, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, as a salvation for many businesses.

The CARES Act provided more than $520 billion to struggling small businesses, largely through the Paycheck Protection Program. In addition, the CARES Act allowed the Small Business Administration to offer nearly $140 billion in low-interest loans.

However, the CARES Act gave only scant consideration to minority and women-owned businesses, Busby said.

A better alternative can be found in the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act Congress is considering now, he said. It is the pending successor to the CARES Act that gives a second round financial bailout to businesses and individuals during the recession caused by the COVID-19 pandemic.

Provisions of the HEROES Act would set aside bailout money for Community Development Financial Institutions, Minority Development Institutions and small firms with fewer than 10 employees.

Other provisions establish technical assistance grants for small community financial institutions and propose federal guarantees for COVID-19 loans.

The HEROES Act “resolves many of the structural barriers that minority and women markets currently face amid the pandemic,” Busby said.

The House subcommittee on diversity and inclusion is considering several other bills to address inequalities in bailout funding. They include:

The New Business Preservation Act: This bill authorizes the Treasury Department to partner with states to make equity investments in new businesses alongside private venture capital companies, with special consideration given to minority and women-owned companies;

The Emergency Lending Diversity Act: This bill would require the Federal Reserve System to use minorities and women as investment advisers, brokers and dealers in investment management agreements;

The Minority Business Emergency Grants Act: This bill would provide $3 billion in grants directly to minority business enterprises through the Minority Business Development Administration.

Carmen Castillo, chairwoman of the U.S. Hispanic Chamber of Commerce, warned that the consequences of losing too many minority and women-owned businesses go far beyond the owners and their employees.

“When we fail to invest in minority-owned businesses, our economy suffers,” Castillo said. “In fact, according to the Kauffman Foundation, if minorities were able to start and own businesses at the same rate as non-minorities, there would be 9.5 million more jobs and, according to Stanford University, $1.3 trillion added to the American economy.”

Karen Kerrigan, president of the Small Business and Entrepreneurship Council, suggested “co-investment” through public-private partnerships.

“That is, when a small business reaches its target goal for raising funds, the federally-run fund can match that investment up to a certain amount,” Kerrigan said.

A+
a-
  • coporate leaders
  • Coronavirus
  • coronavirus relief package
  • COVID-19
  • Minority businesses
  • Small business assistance
  • women-owned businesses
  • In The News

    Health

    Voting

    Economy

    May 8, 2025
    by Dan McCue
    Trump Says UK Trade Agreement Just First of Many Tariff Deals to Come

    WASHINGTON — An exuberant President Donald Trump took the White House equivalent of a victory lap on Thursday as he... Read More

    WASHINGTON — An exuberant President Donald Trump took the White House equivalent of a victory lap on Thursday as he announced an agreement with the United Kingdom on a trade framework that promises to expand market access for billions of dollars of U.S. goods. “Frankly, we’ve... Read More

    Wall Street Points Higher Ahead of Federal Reserve Interest Rate Call

    Wall Street is poised to open with gains as the Federal Reserve wraps up a two-day policy meeting where it will almost certainly... Read More

    Wall Street is poised to open with gains as the Federal Reserve wraps up a two-day policy meeting where it will almost certainly leave interest rates unchanged despite pleas from President Donald Trump for a rate cut as he pursues a worldwide trade war. Futures for the S&P 500 and the... Read More

    US Stocks Sink With the US Dollar's Value as Investors Retreat Further From the United States

    NEW YORK (AP) — U.S. stocks are sinking Monday as investors pull away from the United States because of the... Read More

    NEW YORK (AP) — U.S. stocks are sinking Monday as investors pull away from the United States because of the uncertainty caused by President Donald Trump’s trade war and his criticism of the Federal Reserve. The S&P 500 was 1.2% lower in early trading and back to 15%... Read More

    Trump Says Federal Reserve Chair Powell’s 'Termination Cannot Come Fast Enough'

    WASHINGTON (AP) — President Donald Trump slammed Federal Reserve Chair Jerome Powell on Thursday, reiterating his frustration that the Fed has not... Read More

    WASHINGTON (AP) — President Donald Trump slammed Federal Reserve Chair Jerome Powell on Thursday, reiterating his frustration that the Fed has not aggressively cut interest rates and saying that the central bank leader's "termination cannot come fast enough.” Trump hinted at moving to fire Powell, whose term does... Read More

    Republicans Going Public With Their Growing Worries About Trump's Tariffs

    WASHINGTON (AP) — Manufacturers struggling to make long-term plans. Farmers facing retaliation from Chinese buyers. U.S. households burdened with higher... Read More

    WASHINGTON (AP) — Manufacturers struggling to make long-term plans. Farmers facing retaliation from Chinese buyers. U.S. households burdened with higher prices. Republican senators are confronting the Trump administration with those worries and many more as they fret about the economic impact of the president's sweeping tariff strategy that... Read More

    Wall Street Follows Global Markets Sharply Lower as Trump Doubles Down on Tariffs

    Wall Street is pointing toward major losses Monday, following enormous declines last week, as fears mount that U.S. tariffs announced by... Read More

    Wall Street is pointing toward major losses Monday, following enormous declines last week, as fears mount that U.S. tariffs announced by President Donald Trump will slow global economic growth. European and Asian shares are tumbling sharply, while the leading U.S. index briefly flirted with bear market territory before... Read More

    News From The Well
    scroll top