In 2020, when the U.S. announced emergency loans to help small businesses struggling under Covid-19 shutdowns, funding went disproportionately to the higher-income zip codes of Louisiana’s capital. Better-resourced firms such as medical and legal offices collected most of the relief aid. But in 2021, more loans went to lower-income neighborhoods of the city — to beauty salons, barber shops, day care centers and other more vulnerable enterprises, according to a Bloomberg analysis of Small Business Administration data updated last month. By 2021, the Small Business Administration, the program’s administrator, had admitted about 600 new lenders, including small community banks that serve minorities, and allowed more sole proprietors and self-employed people to participate. The SBA also kicked off its later round of lending in 2021 by prioritizing applications from businesses with fewer than 20 employees during the first two weeks. In communities across the country, these changes resulted in smaller-sized loans going to a much larger number of smaller businesses, many of whom didn’t have established ties to the big banks that dominated the early part of PPP. In total, businesses have received 11.5 million loans through the $800 billion aid program, which is one of the biggest in U.S. history. Data about the program also provides unprecedented insight into small business lending, particularly into racial demographic data not previously collected on a large scale.
