Black-owned businesses will see extended 'challenge' even after pandemic ends

Businesses in minority communities hardest hit by the COVID-19 pandemic are weary of the prospects for a quick
recovery, even with the help of the Paycheck Protection Program loans.

Carver Bancorp. (CARV), the largest African-American operated bank in the country, has originated about $20
million PPP loans to businesses in its New York City metro footprint, with another $23 million in the pipeline.

Carver CEO Michael Pugh told Yahoo Finance on Tuesday that small business entrepreneurs are prioritizing
survival as the NYC area remains under a shelter-in-place order. But re-growing business even after the economy
re-opens will be difficult.

“Small businesses will continue to have a challenge on the other side of this pandemic,” Pugh said.

Congress has launched two rounds of PPP loans totaling more than $600 billion. Through Small Business
Administration lenders like Carver, the PPP allows companies to access a loan that would be forgiven in its
entirety if 75% of the loan is used to keep employees on payroll.

Carver, with about $569 million in total assets, says its PPP loans have been critical in keeping businesses alive in
industries ranging from food service to non-profits.

Pugh said that while the PPP loans offer “one important avenue” to help businesses, keeping their doors open in
the long-run may require further capital relief.

“There’s going to be a lot more work needed,” Pugh said.