Compounded inequality: how the U.S. Paycheck Protection Program is failing Los Angeles Latino small businesses

Abstract

The CARES Act, passed in March 2020, included the Paycheck Protection Program (PPP) which designated $350-billion for small businesses in the United States. Data shows that small businesses, particularly those owned by Latinos and African Americans, have confronted challenges in accessing PPP funds. At the same time, high profile companies like the LA Lakers have admitted to have received and repaid millions of dollars from the PPP. These large companies’ disclosures signal that the PPP is favouring highly resourced and well-connected businesses while failing to help small businesses owned by people of colour. Drawing on interview data from my dissertation on Latino-owned coffee shops in Los Angeles during Covid-19, I use Feagin's conceptualization of institutional racism to contend that the way PPP has played out is not out of the ordinary but rather part of an exclusionary history in entrepreneurship.