The Leadership Conference on Civil and Human Rights

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The Nation's Premier Civil and Human Rights Coalition

Minority-Owned Businesses Not Getting Economic Recovery Loans

December 22, 2009 - Posted by Tyler Lewis

Recent data analyzed by New America Media show that Small Business Administration loans made to struggling businesses as part of the American Recovery and Reinvestment Act are not going to minority-owned businesses.

The America's Recovery Capital (ARC) Loan Program provides loans of up to $35,000 to help small businesses make it through the recession. Of the nearly 4,500 loans handed out this year, 3 percent went to Hispanic-owned businesses, 3 percent went to Asian- or Pacific Islander-owned businesses, and only 1.5 percent went to Black-owned businesses.

More than 91 percent of these loans went to White-owned businesses.

"The breakdown is that people of color are not present at the banks. And the government that's pushing these benefits through are not sensitive to the fact that we are not involved in this distribution network," said Anthony Robinson of the Minority Business Legal Defense and Education Fund. "So to solve this problem we need to incorporate people of color into the distribution chain of banks, business, and government. Otherwise, the flaws of the system will only magnify the inequality that's at the center of our recession."

Minority communities have been hit hardest by the collapse of the housing market and the recession.  African Americans are estimated to lose up to $93 billion dollars before the mortgage crisis is over. The ARC loan program is one of the few sources of capital to which many minority-owned businesses have access.

Civil rights groups and advocates for minority-owned businesses point to continued discrimination in lending practices and poor marketing of the program to minority-owned businesses. 

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