TOPLINE Mark Cuban reached out to minority and women-owned businesses via Twitter on Wednesday in an effort to make sure that these companies can secure their rightful share of the more than $100 billion in PPP loan money still available.
KEY FACTSCuban, whom President Trump named to the "Re-Open America" advisory committee, has recently been critical of the Paycheck Protection Program (PPP), declaring "it's time to face the fact that PPP didn't work."
The execution of the Paycheck Protection Program, which doled out $525 billion in two rounds, was widely criticized.
According to a survey by Global Strategy Group released earlier this week, just 12% of black and Latino business owners who applied for PPP loans reported receiving what they asked for, compared to 38% of all U.S. small businesses that confirmed they had received the assistance they sought.
The Center For Responsible Lending (CRL) predicted this in early April, stating that roughly 95% of black-owned businesses stood "close to no chance of receiving a PPP loan through a mainstream bank or credit union," due to the historically tenuous relationships between minority-owned companies and banks.
On Wednesday morning, Cuban tweeted to his 7.9 million followers, "If you are a minority or woman owned, or any company that believes you are eligible for a PPP loan, but have not been approved, please post an overview of your status here and I will do my best to connect you to a bank. There is still more than $100B left."
Cuban added, "If you know a business that is in that situation, please help them connect here. There are plenty of banks that want to earn their 5%. Let's connect them," while tagging Jill Castilla, President of a Citizens Bank in Oklahoma, and Vista Bank, a community bank with branches throughout Texas, in the follow-up tweet.
$41,361: That’s the median household income for black homes in America as of 2018, which is $29,101 less than the median household income for whites ($70,642).
Cuban has not ruled out running for president in 2020. "I never would have considered it prior to a month ago, but now things are changing rapidly and dramatically," Cuban told Fox News back in April. "I'm not saying no, but it's not something I'm actively pursuing. I'm just keeping the door open" Then, just last week, Cuban said he still may consider launching a campaign, "if something crazy happens." He added, "I'm kind of running out of time. And my family's still against it, so that's been a mess. But it's been so crazy, right? I can never say never."
The principal obstacle for many minorities in their attempts to secure PPP loans has been their poor relationships with major banks. The PPP program was the first time some black and Latino business owners had ever sought a bank loan and, according to the New York Times NYT, "many banks considered applications only from existing customers; some, like Bank of America BAC, even turned away people who had opened credit cards through other lenders."
When asked what sparked this idea, Cuban quickly pointed to VC investor Arlan Hamilton, founder and managing partner of Backstage Capital. Hamilton co-authored an op-ed for Fast Company with Gusto COO Lexi Reese which detailed how Covid-19 has exposed new depths of economic imbalance in America for both employees and small businesses, and how to close the existing funding gap and support business owners. Hamilton made sure he saw the op-ed, which included some alarming data. Cuban told Forbes that Hamilton was the “inspiration” behind Wednesday’s tweets and that “she truly deserves the credit on this.”
Minority business owners are getting shut out from coronavirus relief. Here’s what can help (Fast Company)
Minority-Owned Small Businesses Struggle To Gain Equal Access To PPP Loan Money (Forbes)
Mark Cuban Won't Rule Out Running for President (Newsweek)
Few Minority-Owned Businesses Got Relief Loans They Asked For (New York Times)
Minority-Owned Small Businesses Were Supposed To Get Priority. They May Not Have (NPR)
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