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Press Release

Fed Researchers Find New Evidence of Disparate Pandemic Impact on Minority-Owned Firms

Working with Federal Reserve staff, the US Census Bureau added to the 2021 Annual Business Survey a special module of questions focused on the pandemic and small business finances. Questions ranged from the impact of the pandemic on business sales, to government assistance requested/received, and to the financial health of the firm. That data was released by the US Census Bureau at 10 a.m. ET on March 22.

Economists from the Federal Reserve Banks of Atlanta and Cleveland take a look at the results of these questions—and how they differ by race and ethnicity—in two new research papers.

Cleveland Fed’s Economic Commentary: “Access to Credit for Small and Minority-Owned Businesses

Equal access to small-business credit is a critical underpinning to equity in economic opportunity; however, it is difficult to regularly assess the fairness of credit provision. This article provides preliminary results on new credit access questions added to the Census Bureau’s 2021 Annual Business Survey.

The researchers find that minority-owned businesses generally were just as likely to apply for credit in 2020, but Black-, Asian-, and Hispanic-owned businesses were less likely than white-owned businesses to report receiving all of the credit that they sought. Also, Black-, Asian-, and Hispanic-owned businesses more frequently reported seeking credit in order to cover operating expenses rather than for financing capital expenditures or expansion. Heading into 2022, minority-owned businesses report weaker ongoing viability.

Atlanta Fed’s Policy Hub: “The Impact of the Pandemic on US Businesses: New Results from the Annual Business Survey

The co-authors find that more than 60 percent of business experienced declines in sales. Fully one-third experienced significant declines. More than percent of survey respondents requested government assistance, with the majority receiving 75 to 100 percent of their requests. However, the results also reveal that the fraction of minority-owned businesses receiving at least 75 percent of their requests was significantly lower for minority-owned businesses than for firms not owned by minorities. In general, the results find that minority-owned businesses were disproportionately affected by the COVID-19 pandemic, and expectations for business operations in 2022 are less optimistic than those for nonminority-owned businesses.

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

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Doug Campbell,, 513.455.4479

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