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Minority-owned businesses in US concerned more about access to credit: survey

Xinhua | Updated: 2021-02-06 15:17

People walk past as store advertising sales, as the coronavirus disease (COVID-19) continues, in the Harlem neighborhood of the Manhattan borough of New York, US, Jan 21, 2021. [Photo/Agencies]

NEW YORK - Most US small businesses hit by the COVID-19 pandemic found it hard to access credit after the first two rounds of the Paycheck Protection Program (PPP) had ground to a halt, a Federal Reserve survey has found.

The survey, conducted in September and October, showed that most small businesses impacted by the pandemic worried they would not survive without government help.

Of around 10,000 small businesses surveyed, some 78 percent reported a drop in revenue and 46 percent said they had to lay off their employees. About a third of them said it was hard for them to survive until sales recovered without more government help.

The US government's PPP provides loans to small businesses that can be forgiven as long as the businesses retain their employees or hire them back.

The survey, released on Wednesday, also showed outcomes varied widely by race and ethnicity.

Around 54 percent of white-owned firms considered their financial condition as "fair" or "poor", compared with 79 percent of Asian-owned companies, 77 percent of Black-owned and 66 percent of Hispanic-owned firms.

Meanwhile, minority-owned businesses were more worried than white-owned businesses about their ability to access credit over the next year, according to the survey.

About 30 precent of Black-owned businesses cited credit availability as the most important challenge they'll face over the next year. The same concern was voiced by some 20 percent of Hispanic-owned businesses, 14 percent of Asian-owned businesses and 12 percent of white-owned businesses.

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