On Wednesday, the U.S. Small Business Administration released the most detailed data to date on companies that received funding from the $522 billion federal Paycheck Protection Program. More than 10,680 businesses in Memphis received these forgivable loans, in amounts ranging from $127 to $10 million.
The program was intended to help small businesses maintain payroll during COVID-19 shutdowns. Of the 466 Memphis businesses that received PPP loans over $500,000, only 3 identified as a Black or African American.
However, there’s a huge caveat: Companies were not required to self-identify their race/ethnicity. And the vast majority of PPP recipients in Memphis — more than 95% — did not answer the question about race. That means a complete analysis of racial disparities in PPP recipients isn’t possible.
But from the data that is available, however, 78 PPP recipients in Memphis identified as Black or African American. Just over 300 loan recipients identified as white, 10 as Hispanic, 68 as Asian and four as American Indian. The program closed on Aug. 8.
The population of Memphis is 65% Black and according to the most recent U.S. Census Small Business Owner Survey, Shelby County is home to 50% of the state’s Black businesses.
Yet Black-run businesses here have historically have been pushed to the economic margins, an afterthought in the city’s largest developments and in at least one case – the $64 million IKEA construction project – shut out altogether.
Mark Yates, president of the Black Business Association of Memphis, wasn’t surprised that only three Black businesses received high-dollar loans.
“We know for every $100 that a majority white-owned enterprise makes, Black businesses only account for 83 cents of that same type of dollar,” Yates said.
Yates said to see that three Black businesses survived the effects of systemic racism and the pandemic to be large enough to qualify for $500,000 loans gives him hope.
“Black businesses are phenomenally resilient, and look at the etymology of the word phenomenal, it means phenom, it means genius at being sustainable — we find ways,” Yates said.