Disparities in small business lending have continued amid the COVID-19 pandemic with the implementation of the Paycheck Protection Program (PPP), according to The National Community Reinvestment Coalition (NCRC).

“Payday lenders and pawn shops are an extremely high-cost way to borrow money,” said Jesse Van Tol, chief executive of the National Community Reinvestment Coalition, a grassroots coalition that advocates for equal access to banking services, housing and other financial services. “Targeting people of color for higher-cost products, it’s what we call ‘reverse redlining.’”

For example, a recent study conducted by a team of researchers from the National Community Reinvestment Coalition, Utah State University, Brigham Young University, Rutgers University, and Lubin Research found that banks were three times more likely to request follow-up appointments with white business owners than better-qualified Black business owners, and the Black business owners were subjected to far greater personal and financial scrutiny compared to their equal or less creditworthy white counterparts.