Finance

Black-owned businesses received more PPP loans from fintech lenders – NY Fed study By Reuters


By Jonnelle Marte

(Reuters) – Black-owned businesses were more likely to need to go outside of the traditional banking system when seeking government aid during the pandemic and they had a harder time recovering than white-owned businesses if they didn’t receive assistance, according to research released on Thursday by the Federal Reserve Bank of New York.

The research also showed that businesses in communities with high concentrations of racial minorities, often based in urban areas, faced a deeper downturn – and slower recovery – during the pandemic than neighborhoods with fewer minorities.

Black-owned businesses turned to fintech firms at higher rates when applying for funding from the Paycheck Protection Program, which offered forgivable loans that could be converted into grants, the researchers found. Businesses that used fintech firms to apply for PPP loans also generally asked for and received smaller loans.

The analysis, based on information from small business data processing firm Womply and a Fed survey of 9,693 small businesses, builds on previous research finding that minority-owned businesses were hit harder by pandemic related restrictions and struggled to tap into government aid early on in the crisis because they lacked existing banking relationships.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button