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COVID Relief for Minority-Owned Businesses

COVID-19 has hit many small businesses very hard, very quickly. Many were unprepared for the consequences of a sudden economic downturn and loss of revenue. Still, the devastating economic fallout resulting from stay-at-home orders and mass layoffs has impacted businesses unevenly. Research suggests that minority-owned businesses in particular have struggled the most during the crisis.

Government programs such as the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program have helped struggling businesses weather the storm. Relief funds that are directly set aside for minority-owned businesses are also part of federal relief packages. Here is what we know about the most recent COVID Relief legislation passed into law. We hope that more is on the way in President Biden’s first 100 days.


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Visit the Coronavirus Legal Center and ask a lawyer today.


Do the federal COVID relief packages passed into law in December 2020 include benefits for minority-owned businesses?

COVID-19 relief legislation was signed into law on December 26, 2020. The $900 billion economic stimulus package provides relief to both individuals and businesses, including an expansion of the PPP. Part of that expansion sets aside $12 million explicitly for minority-owned and very small businesses.

The PPP loan program provides funds for qualifying businesses. These loans may be forgiven if the proceeds are used for specific purposes, such as employee paychecks and overhead expenses. The program has also been expanded to include expenses such as:

  • Software costs, cloud computing, and human resource and accounting needs.
  • Property damage due to public disturbances not covered by insurance.
  • Supplier costs related to contracts, purchase orders, or goods that were in effect before taking out the PPP loan.
  • Costs of personal protective equipment (PPE) and other investments to follow current health and safety guidelines.

Generally, you must use at least 60% of the funds to cover payroll, while maintaining normal employee and compensation levels. If you fail to meet these minimum requirements, your PPP loan may not be forgiven.

Studies have shown that minority-owned businesses didn’t necessarily have equal access to COVID-19 relief measures contained in the original Coronavirus Aid, Relief, and Economic Security (CARES) Act. This is, in part, why Congress has set aside funds to address this inequality.

Are there any other federal programs set aside for minority-owned businesses?

The Minority Business Development Agency (MBDA), part of the U.S. Department of Commerce, is specifically dedicated to the growth of minority-owned businesses. They provide excellent resources for minority business owners, including grants and other information that you can use to propel your business forward.

The U.S. Small Business Administration (SBA) provides resources for small businesses of all types, including a variety of loans and guidance available to businesses hit hard by the pandemic.

What type of COVID relief is available to minority-owned businesses at the state level?

State agencies offer varying degrees of financial aid and support for minority-owned businesses. New Jersey, for example, offers grants for economic development specifically targeting  minority-owned businesses. 

Some localities are also matching those grants with local dollars in some cases, including Jersey City, N.J. Local authorities are also assisting businesses by deferring tax filings and payments, while utility companies in some areas are prohibited from shutting off power and water to businesses. General resources to help businesses learn how to apply for loans and grants are available in some localities as well.

Are there any private organizations or initiatives to help minority-owned businesses during the COVID-19 crisis?

Many nonprofit organizations are stepping up to help minority-owned businesses that have been hit hard due to COVID-19 with resources and funds. Below are a few examples of nonprofit organizations and foundations that may be able to help.

  • Local Initiatives Support Corporation. LISC helps U.S. minority-owned businesses with its Small Business Relief grant program. State-by-state mentorship and tailored support services are also available.
  • Accion. This organization provides loans and access to connections among minority business owners throughout the United States.
  • Foundation for Business Equity (FBE). The FBE provides targeted support for Black and Latino business owners. During COVID-19, they created a COVID-19 emergency fund and response team to help minority business owners take full advantage of the resources available to them.

Get additional help for your business

If you have legal questions or need documents that address the COVID-19 challenges faced by you and your business, reach out to a Rocket Lawyer On Call® attorney for fast and affordable advice or visit the Rocket Lawyer COVID Legal Center.

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

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