Black People : Minority Businesses Shut Out of Stimulus Loans

Discussion in 'Black People Open Forum' started by oldsoul, Dec 22, 2009.

  1. OldSoul

    OldSoul Permanent Black Man PREMIUM MEMBER

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    Minority Businesses Shut Out of Stimulus Loans

    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 percent) went to Hispanic-owned businesses, and 151 (3 percent) went to Asian- or Pacific Islander-owned businesses. Only 65, (1.5 percent) went to black-owned firms.
    Overall, white-owned businesses received over $130 million in loans through the program, while Hispanic-owned businesses got $4 million and black-owned businesses less than $2 million.
    In five states - Alabama, Arkansas, New Hampshire, South Dakota, and Wyoming -- every single firm that received an ARC loan was white-owned. In eight other states, including Louisiana and Nevada, all but one loan went to a white-owned firm.
    Civil rights groups and representatives of the minority business communities reacted with anger when told of NAM's findings.
    "It's just horrendous," said Anthony Robinson, director of the Washington, D.C.-based Minority Business Legal Defense and Education Fund (MBELDEF). "During this economic recession, there is no recognition or sensitivity to the need to support and benefit people of color."
    "The data raises troubling questions" and should trigger an investigation," says Oren Sellstrom of San Francisco's Lawyers Committee for Civil Rights. "This should be a red flag for the SBA and the banks. It gives us the indication that something may be amiss and further explanation is warranted."
    Census figures put black business ownership at 5 percent and Hispanic business ownership at about 7 percent -- more than double the numbers getting these SBA-backed loans.

     
  2. Sunnyb

    Sunnyb Well-Known Member MEMBER

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    Thank you so much for this information Brother, I thought it was just me. The more things change, the more they stay the same!!!

    The Bank called "me" to ask if I needed extra money for my business expansion the Director hounded me to come in and sign up for a Business Loan. I did, paperwork was straight, figures were right (so she said) everything was good, and a couple weeks later I get a denial letter. However they were nice enough to send me a Business & Personal credit cards with big limits, that I never applied for mind you, with APR's much higher than the 3% for the loan.

    The Sister at the bank informed me that it was a 'test' and I should use those cards, and show that I'm "serious" and maybe they would give me a loan within a year.

    She informed me that they wanted me to build "trust" with them before they gave me the loan.....no what they want is for me to constantly run these cards up and pay the high interest and fees for a year so they could make extra money off of me. Needless to say I politely sat the 2 credit cards which were cut in half on her desk and told her I decline that offer.

    Tried with the SBA last October and they were happy to sign me up, and satisfied with what they saw......but still got declined.

    The excuse....they aren't giving money to anybody, even if the numbers look good. BS, I know a few business owners that aren't of color, and many have received loan approvals, and they said their credit is shot, and their companies are totally in the red.

    This is happening to many of our people that I meet at conferences, etc.
    I'll make a way though. Didn't start with govt money, and hope not to ever need it.

    Peace
     
  3. Ankhur

    Ankhur Well-Known Member MEMBER

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    As an individual your experience, should be shocking and of course seen as reprehensable, at this late date from the Jim Crow laws, but our collective efforts to makle demands on financial imstitutions, (that have been bailed out with tax dollars that our children and grandchildren will have to pay) must be strategized.
    The privately owned Birmingham bus companies that went out of business during the 60s and stayed out of business for decades after the boycotts are aware of our collective power to,
    as Macolm X said, speak "the man's" language, therefore in the interest of the future of all small Black businesses a stretegy of harnessing some of our 800 billion as barganing chips regarding our investments and strategic collective boycotting, as forms of reward or punishment to those who benefit or harm the collective Black business community.
    Sounds far fethched but such a strategy is crucial, and effective in an environment of a struggling economy and a dieing dollar value.

    In terms of the larger picture about the stimulus;

    Any group of people who are not focused on economics and finance, will never have financial power
    and
    any group of people who are not focused on politics and the machinations of
    federal, state and local governments will never have power over thier communities where they live and thier children gio to school.

    In 2010 we must learn to be chess players rather then expert checker players
     
  4. Sunnyb

    Sunnyb Well-Known Member MEMBER

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    Amen Brother!

    Like I said, i started the business w/o govt. funds, and will be glad to continue w/o if the Universe deems so.

    However, in being aware of their tactics, I refuse to take the crumbs they give with strings attached.

    I know she was sincere in offering, but don't call me asking to give me money if you ain't givin it up!!! LOL I'm only human!

    In the meantime these crooks we call the govt. have no problem trying to tax me into oblivion! Sigh......

    And the beat goes on....... :10500:
     
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