Minority Businesses Stand to Benefit From New PPP Rules, Pilot Program

There's a lot in the new stimulus to help sustain and even foster MBEs.

Source : Pxhere

December 24, 2020

Author : Alex Bustillos

In addition to earmarks meant to help minority businesses secure forgivable loans, new legislation passed by Congress creates a pilot program to help foster small businesses owners around historically black colleges.

The new federal stimulus bill, packaged with the omnibus bill that was passed by Congress on Monday contains a number of provisions that will empower minority businesses and communities. Over the past week, Contractor News has continued to pour through the more than 5,500 page document to bring our readers the most relevant information on contracting and small business.

According to one poll that Contractor News reported on, only 12 percent of minority-owned small businesses said they got the relief they needed from the government. Additionally, in cities like New York, 85 percent of women and minority-owned small businesses said they didn’t expect to last longer than six months.

These problems have widely been attributed to minority businesses not having as strong relationships with banks who doled out the loans under the Small Business Administration’s Payment Protection Program (PPP).

But with a second round of $284 billion PPP funds potentially coming with Congress having passed the new stimulus bill, there is reason to hope,and also reason to believe that some of the previous pitfalls of the program are being addressed.

For example, the new bill earmarks $15 billion of the $284 billion in new PPP funds to community lenders and small depository lenders rather than traditional banks.This policy is meant to directly address some of the issues that minority-owned businesses have had in securing PPP funds. 

There’s also another $15 billion allocated for borrowers that have 10 or less employees or are in a low or moderate-income area for loans totaling less than $250,000.

Additionally, the stimulus gives $25 million to the Minority Business Development Center Program for necessary expenses and to help them assist minority business enterprises (MBEs) access government assistance related to the coronavirus.

While small businesses help to empower communities, the legislation also offers direct aid to minority communities. On the omnibus side, which funds the federal government through September, a provision establishes the creation of the Connecting Minority Communities Pilot Program. 

The program is funded to the tune of $285 million through September and forces the creation of the program within 45 days of the enactment of the act. “The purpose… shall be to provide grants to eligible recipients in anchor communities.”

Anchor communities are the areas around historically black colleges and other minority institutions of learning. Forty percent of grants are to be earmarked for HBCUs.

The program aims to help eligible recipients in anchor communities “for the purchase of broadband internet access service or any eligible equipment,” such as hotspots, modems and routers and also help develop and support would-be operators of small businesses in such communities. It also intends to”hire and train information technology personnel” to “facilitate educational instruction and learning.”

The omnibus also appropriates $48 million for the Minority Business Development Agency. With just $16 million earmarked for overhead, that leaves $32 million for the agency’s “fostering, promoting, and developing minority business enterprises, including expenses of grants,contracts, and other agreements with private or public organizations” through September.

Category : Disadvantaged Business Enterprises Minority Business Enterprises Small Business Enterprises Coronavirus Pandemic Diversity Outreach Economic Stimulus Entrepreneurialism Federal Government

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