Ever since Congress began making funding available to help businesses through the COVID-19 pandemic, stories have been coming in from across the country of women and minority business owners being left out.
In Lansdale, Pennsylvania, an accountant still awaiting funding said she has found that the money earmarked for small businesses in the first congressional package seemed to be "applied unevenly."
In Annapolis, Maryland, a law firm filed a class action suit, arguing that a provision making sole proprietors wait an additional week to apply for Payroll Protection Program (PPP) loans was discriminatory, because minority- and women-owned businesses make up a larger portion of sole proprietorships.
And in Connecticut, Rep. Jim Himes and state Treasurer Shawn Wooden took aim at that same program. In a column for the Stamford Advocate, they wrote, "We fear that many minority and women owned businesses will end up shut out of the Small Business Administration's PPP." They said they have been "hearing time and time again of underserved communities lacking access to these lending programs."
Here in Houston, Texas, where I live and advocate for women and minorities in the energy industry, I've been hearing these kinds of stories repeatedly. These entrepreneurs applied for relief funds, but didn't get a penny before the money ran out.
Most businesses are struggling amid the COVID-19 pandemic, and it certainly isn't just those owned by minorities and women who missed out on the initial $350 billion for small businesses. Funds were snatched up so quickly that "it was like Hunger Games," one banking executive told NBC.
But overall, minority- and women-owned business enterprises are being hit especially hard. "MWBES are most at-risk from COVID-19, but may benefit less from policy solutions," the Brookings Institution warned last week.
There are numerous reasons for this. First, a disproportionate number of these businesses are in sectors especially hard hit by the pandemic, including retail, food services and "accommodation industries," Brookings notes.
The first COVID relief package passed by Congress was also structured in a way that favored existing customers from large banks. And since women and minorities generally have a harder time getting bank loans for their businesses in the first place, they're less likely to be existing customers.
The second package, which passed this week, includes $60 billion set aside for "set aside for community banks and 'underbanked' businesses and non-profits that Democrats said lacked access to the program, such as those that are rural or owned by minorities or women," Newsweek reports.
Until the money is dispersed, we won't know how much this new bill achieves for minority and women business owners. It's crucial that relief funds make it to these folks -- and that future packages include targeted funds for them as well.
We fuel the recovery
It isn't just these business owners, their employees and their families who lose out when minorities and women are disproportionately hit. It's the entire economy. We saw this happen 12 years ago.
"MWBEs were less likely to survive the great recession, but drove the recovery," Brookings says.
"Nationally, MWBEs added 1.8 million jobs from 2007 to 2012, while firms owned by white males lost 800,000 jobs, and firms equally owned by white men and women lost another 1.6 million jobs."
The most recent State of Women-Owned Business Report from American Express found that "total employment by women-owned businesses rose 8 percent, while for all businesses the increase was 1.8%."
Some MWBEs (including mine) also focus on bringing gender equality, diversity and inclusion to entire sectors—all of which can boost profits and innovation.
There are private organizations looking to help MWBEs now, from organizations like the Women's Business Enterprise National Council and the Hispanic Chamber of Commerce to individual entrepreneurs. But it isn't enough. Business owners like these need their fair share of funding the government is making available, and they need it now.
For years, lawmakers across the political spectrum have insisted that they want minority- and women-owned businesses to flourish. Both sides make promises during every election season. It's time for them to ensure their money goes where their mouths are.
Across the country, there are more than 11.6 million women-owned firms that employ nearly 9 million people and generate annual revenues of $1.7 trillion, according to the National Association of Women Business Owners. The Business Journals, meanwhile, estimates that there are more than 11 million minority-owned businesses, employing more than 6.3 million people and generating more than $1.8 trillion in revenue annually.
We vote. We contribute to campaigns. And we'll remember this in November.
Katie Mehnert is CEO of Pink Petro, and author of Grow with the Flow.
The views expressed in this article are the author's own.
