Minority Businesses Shut Out from Stimulus

Business shut out were largely Black and Hispanic-owned...

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All that stimulus money and minority businesses aren't seeing a whole lot of it. From New America Media:

Loans handed out to struggling small businesses as part of President Barack Obama’s stimulus package have largely shut out minority businesses -- especially those owned by Blacks and Latinos -- according to data provided by the federal government’s Small Business Administration (SBA) to New America Media (NAM).

On June 15, the SBA, using money from the $787 billion American Recovery and Reinvestment Act, launched the ARC program, America’s Recovery Capital, giving banks and credit unions 100 percent guarantees so they’re taking no risk when they make loans of up to $35,000 to previously successful, currently struggling small businesses to help them ride out the recession.

Under the program, the borrower pays no interest and makes no payments for 12 months, then has five years to repay the loan. SBA charges no fees and pays interest to the lender at prime – the rate of interest at which banks lend to favored customers – plus 2 percent.

The Obama Administration does not report the racial breakdown of who's benefiting from these loans at Recovery.gov, but data obtained by NAM from the SBA found that of the 4,497 ARC loans where the race of the borrower was reported, 4,104 (over 91 percent) went to white-owned firms, 140, (3%) went to Hispanic-owned businesses, and 151 (3%) went to Asian- or Pacific Islander-owned businesses. Only 65, (1.5%) went to black-owned firms.

Keep reading on the dispersal over at New America Media

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