The story of American businesses in the coronavirus pandemic is a tale of two markets — one made up of tech firms and online retailers as winners awash in capital, and another of brick-and-mortar mom & pop shops that is collapsing.

Why it matters: The coronavirus pandemic has created an environment where losing industries like traditional retail and hospitality as well as a sizable portion of firms owned by women, immigrants and people of color are wiped out and may be gone for good.

• This dichotomy of winners and losers could shape the face of American business for decades to come.

What's happening: Banks are tightening lending standards and weeding out some of the neediest borrowers.

• The Fed's latest survey of senior loan officers finds that banks have raised interest rates and collateral requirements as well as loan covenants and are charging higher premiums for what they see as riskier loans.

What we're hearing: Lenders are applying a "COVID filter" to determine which companies are risky, making decisions largely based on firms' performance from January through June, says Alex Cohen, CEO of Liberty SBF, a commercial real estate lender that works with the SBA to provide firms government funding.

• "If you’re a prime borrower whose business has done well, survived and thrived during COVID, your access to capital is significantly better than businesses that have had any disruption whatsoever," he tells Axios.
• "For businesses like hospitality, health care, restaurants — which have been the hardest hit of any that we cover — access to capital is just extremely difficult if not impossible."

The big picture: Government agencies are supposed to act as a counterbalance, but instead have made the problem worse.

• The Paycheck Protection Program disproportionately benefited large and well-heeled companies, data show, while missing the industries and areas most heavily impacted by COVID-19.
• The Fed's Main Street Lending Program has been a "failure" and "unmitigated disaster," economists say, because banks aren't inclined to lend even the Fed's money to distressed companies, and because the regulations governing the program are too strict.

The result: Big companies have borrowed a record $1.9 trillion in corporate debt, including leveraged loans and investment grade and junk bonds thanks to the Fed's unprecedented asset purchases. But, as Bloomberg pointed out...

• More than 80,000 small businesses permanently closed from March 1 to July 25, including about 60,000 local businesses, or firms with fewer than five locations, according to Yelp.
• In the first seven months of the year, chapter 11 filings rose 30% from a year earlier, according to Epiq.
• About 800 small businesses filed for Chapter 11 bankruptcy from mid-February to July 31, according to the American Bankruptcy Institute.

U.S. banks reduced lending in the second quarter after accounting for the PPP, new analysis from S&P Global shows. And even when including more than $500 billion in PPP loans that used government funds, lending increased by just 0.3% from Q1.

• Only one of the top 10 banks by total assets as of June 30 — TD Bank — had non-PPP loan growth on a quarter-over-quarter basis.

The intrigue: Banks aren't only cutting back on commercial and business lending, they slashed their credit card exposure by 7.4% in the second quarter.

• Credit card loans totaled $808 billion across the industry as of June 30, S&P noted.
• That was the lowest level since Sept. 30, 2017.

Millions of angry gamers may soon be calling for an antitrust crackdown on Apple, as the company faces a new lawsuit and PR blitz from Epic Games, maker of the hit video game Fortnite. (Axios)

The Senate and the House have both left Washington, D.C., until September — the latest sign that a deal on a fifth coronavirus relief package is at least weeks away. (The Hill)

U.S. Trade Representative Robert Lighthizer will meet with Chinese Vice Premier Liu He today to review the phase one U.S.-China trade deal. (WSJ)

The number of Americans filing for jobless benefits is finally coming down in a meaningful way and dropping across the board.

By the numbers: Claims for traditional initial jobless claims last week fell by more than 156,000 to 832,000 while initial claims for the Pandemic Unemployment Assistance program declined to below 500,000 for the first time since April 18.

• PUA claims had reached more than 1 million for the week ending July 4.
• Regular initial jobless claims remained below 1 million for the second week in a row after 19 straight weeks above 1 million.

State of play: The number of people receiving unemployment benefits overall declined in almost every program, except the Pandemic Emergency Unemployment Compensation and Short-Term Compensation programs, which both saw increases.

• The increases suggest a growing number of individuals who are not classified as unemployed are receiving benefits.

The big picture: Overall, 3.1 million fewer people were receiving jobless benefits for the week ending July 25 than the previous week.

• That reversed the broader trend for July when first-time traditional jobless claims fell, but the number of people receiving money from all unemployment programs rose.

Watch this space: Gus Faucher, economist at PNC Financial, said the extra $600 a week in unemployment benefits that expired at the end of July helped prop up outlays for many households. Without it, some consumers will likely cut back on their spending this month.

• “That is going to be a drag on the recovery,” he told WSJ.

Of note: We use non-seasonally adjusted figures here at Axios Markets because seasonal adjustment since March is significantly distorting the data.

Axios' Ben Geman and I write: Socially conscious and sustainable investing is surging, but funds that carry these labels don't currently have to meet any standards or definitions and the practice would benefit from more federal oversight, Barclays analysts say in a new report.

The big picture: A key takeaway is that self-identified U.S.-focused Environmental, Social and Governance (ESG) funds are not especially different than their non-ESG counterparts.

• "Using two decades of funds’ holding data, we find that ESG-labelled funds do not necessarily provide more ESG exposure than conventional ones," notes the report.
• It adds that "ESG funds have higher, but not significantly different, ESG scores than those of non-ESG funds."

Why it matters: As of early this year, sustainable mutual funds and ETFs focused on U.S. equities had over $240 billion in assets under management, or about 2.3% of overall U.S. equity fund assets, Barclays calculates.

• They are drawing one in four professionally managed dollars in the U.S.
• And since 2013, ESG funds in the U.S. have seen average inflows of about 7% per year, while non-ESG funds have seen yearly outflows of 2%.

Another takeaway is that returns in ESG vs. non-ESG funds are quite similar, with ESG funds providing slightly better performance over the last two years.

Keep it 💯: So why all the fuss about ESG? "We find that conventional funds charged lower fees than ESG-focused funds."