- Just as the coronavirus hit communities of color disproportionately hard in the spring, those same communities face a tougher path to full economic recovery.
- According to a survey conducted by Goldman Sachs, Babson College, and David Binder Research, 39% of Black business owners receiving PPP loans have already been forced to lay off employees. That share was just 32% among all survey participants.
- Nearly one-third of black small business owners have seen less than 25% of their pre-pandemic revenues return. Half of overall respondents said the same.
- Black business owners are also at a greater risk of cutting salaries, laying off employees, and depleting their cash reserves if Congress fails to pass new stimulus this month.
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Black business owners are feeling a disproportionate amount of economic pain and face a steeper climb to pre-pandemic activity, Goldman Sachs found in a recent survey.
The coronavirus pandemic slammed communities of color harder than others through the spring. The survey, conducted from September 1 to September 2, signals the groups’ recovery will be similarly difficult.
A total of 39% of Black small business owners who received loans through the Paycheck Protection Program have already been forced to lay off employees or cut wages due to the funds being exhausted, according to the bank. By comparison, 32% of all respondents said the same.
A bigger gap emerged between those who’ve struggled to recuperate sales. Nearly one-third of Black business owners said they’ve seen less than 25% of their pre-pandemic revenues return, while just 16% of all respondents suffered the same hit.
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Black business owners also emphasized the need for additional, targeted stimulus from Congress. Senators returned to the Capitol on Tuesday to continue negotiations over deadlocked aid proposals. Republicans are poised to introduce a $500 billion bill this week with funds for a $300-per-week expansion to unemployment benefits.
Democrats have united against the measure. Senate Minority Leader Chuck Schumer deemed it “emaciated,” and the party continues to call for a bill of at least $2.2 trillion in relief spending.
Four in 10 Black small business owners said they will be forced to cut salaries or lay off employees if Congress fails to enact new stimulus in September, surpassing the 36% share across all respondents.
A total of 43% Black business owners said the lack of a September deal would lead to their cash reserves being depleted by the end of the year. Just 30% of all respondents said the same.
The survey was conducted along with Babson College and David Binder Research. It included 860 small business owners across 47 US states and three US territories. Women comprised 55% of the respondents.
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