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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.

The U.S. Treasury Department said on Friday that it approved four additional state plans for the State Small Business Credit Initiative worth $750 million, bringing total approvals under the COVID-19 recovery venture capital program to $2.25 billion, Reuters reported. The $10 billion SSBCI program aims to address a shortage of capital for new business startups and other small business developments, particularly in disadvantaged communities, by attracting $10 of private investment for every $1 of taxpayer funding. It was reauthorized and expanded as part of last year's $1.9 trillion American Rescue Plan Act. The state plan approvals announced on Friday for New York, Colorado, Oregon and Montana include a variety of venture capital funds, loan participation programs, loan guarantees and collateral support programs to make capital more accessible to small firms and entrepreneurs. New York state was approved for up to $501.5 million, including a capital access program, loan guarantees, loan participation and venture capital programs, the Treasury said. The state has allocated $154 million to programs to provide equity support to small businesses through private venture capital and accelerator funds. Colorado was approved for up to $104.7 million, Oregon for up to $83.5 million and Montana for up to $61.3 million, the Treasury said.

As the pandemic shuttered businesses and forced people out of work, the federal government sent a flood of relief money into programs aimed at helping the newly unemployed and boosting the economy. That included $3.1 trillion that former President Donald J. Trump approved in 2020, followed by a $1.9 trillion package signed into law in 2021 by President Biden. But those dollars came with few strings and minimal oversight, the New York Times reported. The result: one of the largest frauds in American history, with billions of dollars stolen by thousands of people, including at least one amateur who boasted of his criminal activity on YouTube. Now, prosecutors are trying to catch up. There are currently 500 people working on pandemic-fraud cases across the offices of 21 inspectors general, plus investigators from the F.B.I., the Secret Service, the Postal Inspection Service and the Internal Revenue Service. The federal government has already charged 1,500 people with defrauding pandemic-aid programs, and more than 450 people have been convicted so far. But those figures are dwarfed by the mountain of tips and leads that investigators still have to chase. Agents in the Labor Department’s inspector general’s office have 39,000 investigations going. About 50 agents in a Small Business Administration office are sorting through two million potentially fraudulent loan applications.

U.S. small business confidence edged up in July as fuel prices eased and job openings became marginally easier to fill, but inflation worries intensified, a survey showed yesterday, Reuters reported. The National Federation of Independent Business (NFIB) said its Small Business Optimism Index rose four-tenths of a point last month to 89.9, the first monthly increase since December. Still, the level remains well below the 48-year average of 98. Some 37% of owners reported that inflation was their most important problem, the highest level since the fourth quarter of 1979. Surging inflation has forced the Federal Reserve to raise rates aggressively this year in a bid to slow the economy without tipping it into recession. But beyond the sharp slowdown in the housing market, the impact on the economy and price pressures has been hard to see. U.S. job growth unexpectedly accelerated in July, and economists polled by Reuters estimate consumer prices rose 8.7% last month from a year earlier. That would be down from the 9.1% annualized rise in June but still far higher than the Fed's 2% goal. The U.S. central bank is widely expected to continue to raise interest rates further this year, increasing the risk of recession.

After two years of shutdowns and restrictions due to the COVID-19 pandemic, small businesses are straining to keep up with price increases without losing customers to larger competitors, the New York Times reported. They are struggling to keep positions filled as competition for workers remains at a fever pitch. And just at the moment that many business owners begin to recover and shore up their depleted savings, they’re worried that the Federal Reserve’s medicine for inflation will bring fresh hardship: higher borrowing costs and timid consumers. Surveys show that small-business sentiment has taken a markedly pessimistic turn in recent months — even more so than that of professional forecasters and corporate executives. In June, the National Federation of Independent Business measured its lowest reading ever for economic expectations. The nonprofit Small Business Majority, in a survey in mid-July, found that nearly one in three small businesses couldn’t survive for more than three months without additional capital or a change in business conditions. The U.S. Chamber of Commerce’s Small Business Index for the second quarter showed that inflation had skyrocketed to the top of owners’ concerns. Seventy-five percent of participants in Goldman Sachs’s small-business coaching program reported that higher costs had impaired their finances.