A study released by WalletHub this week showed that North Carolina leads the country in search for loans as “people are having to go into debt to survive the twin blows of health and economic crises.”
This study follows news that minority-led businesses were being shut out of the Paycheck Protection Program. According to the Center for Responsible Lending, an overwhelming majority of minority-led businesses “stand ‘close to no chance’ of receiving a PPP loan through a mainstream bank or credit union.”
This week, Cal Cunningham released his priorities for next steps as communities begin to reopen, including securing support for community development financial institutions and other banks with histories of building relationships with and lending to minority-owned businesses. He understands that the discrimination minority-owned businesses face when trying to access capital is not unique to the coronavirus pandemic. Cal is committed to ensuring small businesses get the urgent funding they need now and solving this problem in the long-term.
More than 1 million North Carolinians have filed for unemployment, faced devastating impacts to their income, and are now searching for relief through loans.
That’s why Cal’s plan also calls for a stronger safety net to help families weather the economic impact of COVID-19, including extending and increasing unemployment benefits and expanding on the successes of the Affordable Care Act to make it easier for newly unemployed and uninsured people to gain coverage.
Cal’s priorities stand in stark contrast to Thom Tillis, who in the North Carolina General Assembly “opposed Medicaid expansion and was part of a Republican effort to reduce the state’s unemployment benefits — two things now hurting North Carolina residents out of work.”
WRAL TechWire: Study: North Carolina leads nation in search for loans during pandemic
May 27, 2020
- North Carolinians are leading the United States in an area of economic demand that’s not likely to be a rank any state leaders really like: Searching for relief through loans as the COVID-19 pandemic continues to hit hard.
- Our state ranks No. 1 as the one in which people are having to go into debt to survive the twin blows of health and economic crises, says financial news and information site WalletHub.
- With nearly 1 million NC workers having now filed for unemployment, NC residents rank 12th or higher in the four categories reviewed by WalletHub for the study.
- “Taking out a loan at this time could risk digging a deeper hole for one’s family or business. We have no certainty how long this crisis will last, nor what the devastation to business and person/family incomes will be,” Frank Shafroth, Director, Center for State and Local Government Leadership at George Mason University, told WalletHub.
- To put North Carolinians’ demand into perspective, WalletHub notes that the pandemic has led to “nearly 39 million Americans becoming jobless during the coronavirus pandemic and 44 percent of Americans expecting to go into more debt because of the crisis.”
WRAL TechWire: Black-led businesses getting shut out of PPP loan program, owners and experts say
May 22, 2020
- Congress has authorized $660 billion in two rounds of federal emergency loans, including $60 billion for minority businesses that struggled to get it the first time.
- But Pullen says she hasn’t seen any of it, and worries that she’s getting shut out. She applied the Economic Injury Disaster Loan and the Paycheck Protection Program (PPP), administered by the Small Business Administration (SBA); both times declined.
- Even in the best of times, minority-owned businesses face a tougher time gaining access to capital. But during a pandemic, many say it’s getting even harder. Lack of resources and access to networks, along with the government’s “first come, first serve” policy, is causing them to bear the brunt.
- The Center for Responsible Lending, a non-profit group that combats abusive lending practices, says roughly 95 percent of black-owned businesses, 91 percent of latino-owned businesses and 75 percent of asian-owned businesses stand “close to no chance” of receiving a PPP loan through a mainstream bank or credit union.
- “Unfortunately, like the initial PPP funding, most of these new funds will continue to go to larger, wealthier and less diverse businesses leaving smaller businesses owners of color excluded from the program,” said Ashley Harrington, director of federal advocacy and senior council for the Center for Responsible Lending in a statement.