Existing Gender and Economic Disparities Must Be Accounted For in Small Business Relief Programs
September 22nd, 2020
The following is a summary of remarks provided for Working Woman Report. To listen to the full interview, listen here:
Even before the pandemic hit, women, particularly Black and Brown women had more debt than men, a greater prevalence of liquid asset poverty and received lower wages. A full understanding of COVID-19’s disproportionate impact on women must also take into account the experiences of women-owned businesses, especially those owned by Black women. Black women-owned businesses are often in the sectors most impacted by lock-down orders such as personal care, retail, and restaurants all of which are vital to their communities and local economy.
Nationally, Black women-business owners account for 59% of all Black businesses equating to about 1.52 million businesses nationally. Ninety-seven percent (97%) of Black-women owned businesses are sole proprietorships with just under $14,000 in average revenue. This point is of particular importance in understanding who was left behind by the federal Paycheck Protection Program, where sole proprietors were unable to apply for the program in the first phase of the program, during which time almost $250 billion had been deployed to other businesses.
In Mississippi, there are over 89,000 women owned firms in comparison to 125,000 firms owned by men. This is just 38% of the total number of firms in the state. Within the state, there are also significant disparities in annual revenues. On average, women-owned businesses generate $177,000 in gross sales, but for men it is over 3 and half times that amount in excess of $600,000. COVID-19 now lessens the opportunities to eliminate the gender-based disparities.
Small Business Relief
Local and federal efforts have fallen short in bridging the gap in relief women-owned businesses received. In May, the MS legislature approved $300 million in CARES Act funding for two Mississippi small business programs. Since then, the first program, established to quickly provide $2,000 grants without application, has only issued 14,106 payments totaling $28.2 million out of the $60 million allocated for the program. One hurdle identified in the program included the requirement for business owners to have filed their 2018 or 2019 state income tax returns to receive this money. About 25% of the initial applicants had not filed and were disqualified.
Additionally, the Mississippi Development Authority (MDA) administered a second program, the $240 million Back to Business grant program. For the first 60 days of the program, $40 million was to be prioritized for minority and women-owned businesses. But, during this 60-day window, MDA deployed less than $2 million total to just 2,000 businesses, despite tremendous demand. During that time, over 20,000 businesses had applied, seeking $100 million in relief. Nearly 60% of those businesses that had applied were minority and women-owned businesses. As of September 1, still only 3,335 minority or women-owned grants had been approved, for a total of $9.5 million. This is far short of the $40 million allocated to minority and women-owned businesses. In looking at the program as a whole, in three months only $37 million of the available $240 million has been deployed to 11,386 businesses.
The data and the stories we hear from our own networks tell us that women-owned businesses are still struggling and need additional relief. Businesses reported common refrains of challenges, such as lack of information about the status of their application, difficulty in reaching anyone for help or questions, and the complications of the formula resulting in reductions of the grant amount. Other Southern states have not struggled the way Mississippi has in getting these funds out the door. Mississippi lags both in how slowly it has gotten the money out and the size of relief it is providing.
In order for women business leaders to emerge from this crisis, relief programs must address existing racial, gender and economic disparities to ensure communities and businesses most in need receive the resources. Officials need to engage community groups and leaders to both understand what is needed and to help ensure effective deployment of CARES Act dollars. As these programs conclude, Mississippi needs to ensure transparency and accountability in the deployment of these funds, particularly by reporting the number of Black women-owned firms that applied for support, the number receiving grants and ultimately the amounts of money received.
 Miller, Sara. Proposed Rollbacks in Consumer Financial Protections Would Be Detrimental for Women’s Economic Security. March 17, 2020.
 Association for Enterprise Opportunity. The Tapestry of Black Business Ownership in the U.S., https://aeoworks.org/images/uploads/fact_sheets/AEO_Black_Owned_Business_Report_02_16_17_FOR_WEB.pdf
 Center for Responsible Lending, “The Paycheck Protection Program Continues to be Disadvantageous to Smaller Businesses, Especially Businesses Owned by People of Color and the Self-Employed”. April 6, 2020. (firms, such as the self-employed, from applying for loans until April 10th, one week after the program opened to other businesses. As of April 13, 2020, almost $250 billion of the initial $350 billion had already been allocated. The first round of PPP funding was depleted entirely by April 16, 2020.)
 Hope Policy Institute, Mississippi’s Small Business Relief: Gaps and Opportunities. http://hopepolicy.org/manage/wp-content/uploads/Mississippis-Small-Business-Relief-Gaps-and-Opportunities-Brief-Final-1.pdf. August 25, 2020.
 Pender, Geoff. Grant program drags slowly as small businesses struggle to survive pandemic. September 1, 2020. https://mississippitoday.org/2020/09/01/grant-program-drags-slowly-as-small-businesses-struggle-to-survive-pandemic/
 State of Mississippi, http://www.transparency.mississippi.gov/
 Hope Policy Institute, Deep South States Provide Over $1.1 Billion in Small Business Relief: Who Benefits, Who is Left Behind? http://hopepolicy.org/manage/wp-content/uploads/Deep-South-States-Provide-Over-1.1-Billion-in-Small-Business-Relief-Brief-Final-1.pdf. August 26, 2020.