(NNPA)—A recent Wall Street Journal story detailed the inability of Black-owned businesses to be approved for SBA-backed loans made through America’s most prolific small business lenders. And while it was satisfying—in a weird kind of way—to have confirmed what Black business owners have known for years, it was something of a gut punch to learn just how bad the situation has become.
“Black borrowers received 1.7 percent of the $23.09 billion in total SBA loans. The percentage is down sharply from 8.2 percent of overall SBA loan volume in fiscal 2008. By number of loans, Black-owned small businesses got 2.3 percent of the federal agency’s roughly 54,000 loans last year, down from 11 percent in 2008,” the newspaper reported.
According to the SBA, their average loan is $426,796, more than double the average of $192,919 in 2005. That’s a major problem for Black businesses because 80 percent of the loans Black business need are $150,000 or less.
As you might imagine, there are several reasons this latest report is so disturbing. In addition to Black-owned businesses being approved for 2.3 percent (only 1,242) of the 54,000 SBA-backed loans, Black businesses received just 1.7 percent of the dollar value of those loans—$325 million—at a time SBA lending spiked to $30.29 billion.