Under new administration and leadership, the Small Business Administration is taking steps that could help address the myriad criticisms it has faced during the pandemic.
Isabella Casillas Guzman, head of the SBA, signed an alliance this month with the National Pan-Hellenic Council (NPHC), a group of nine historically Black fraternities and sororities with branches nationwide. The SBA said in a news release that the alliance aims to improve financial literacy and access to SBA resources for Black entrepreneurs.
“Working alongside partners and allies within the Divine Nine will provide even greater reach for the SBA to better provide the highly entrepreneurial Black community access to networks, financial literacy, technical training, and capital readiness so they can successfully realize their American Dreams of business ownership, create jobs, and advance our economy,” Guzman said.
In 2020, Black-owned businesses received disproportionately fewer loans through the Paycheck Protection Program, which highlighted a comparative shortfall of financial connections and problems with SBA rules governing the loans.
An analysis of PPP loans given in 2020 found that roughly 897,000 recipients answered questions on owner race. Out of those, 653,693, or 72%, said they were white while 76,072, or 8.4%, were Black business owners. By 2021, that percentage had jumped to 42% of loans going to Black business owners.
The data represents only a sample of the total loans given during the program’s lifespan. The PPP program, which ended in May 2021, provided a total of 11.8 million loans and collected demographic information on 2.85 million loans.
“This collaboration will give NPHC members critical access to information that will promote small business growth and create jobs in all sectors of our economy,” said Reuben A. Shelton III, NPHC chairman.
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