Rural and minority-owned small businesses likely left out of PPP loans, watchdog finds
Rural, minority and women-owned businesses may not have received loans as intended through the federal Paycheck Protection Program due to a lack of prioritization by the Small Business Administration, the agency's inspector general said in a Friday report.
The big picture: Many businesses funded by the program — which managed to allocate $342.3 billion in loans — were already rich or had access to capital markets, Axios' Felix Salmon reported last month.
What they found: Since the SBA did not require borrowers' demographic information, it is unlikely the agency can find out how much money was given to minority or rural businesses — key markets identified by the CARES Act.
- The SBA did not give borrowers guidance on how deferment works with PPP loans within a 30-day period as required — meaning borrowers may not know what they need to do to repay outstanding balances later on.
What they're saying: “The Inspector General’s review makes clear that the Trump administration must immediately fix the Paycheck Protection Program to help the truly small businesses that have so far not received the help they need," Senate Minority Leader Chuck Schumer, who requested the watchdog report along with other Democrats, said in a statement on Friday.
- "SBA must do more to stop the special treatment for well-connected big business at the expense of legitimate small business struggling to stay afloat and support their workers during this pandemic," Schumer said.
Axios has decided to return its PPP loan, after qualifying in April.
Go deeper: How many big companies got PPP loans