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Working with Federal Reserve staff, the US Census Bureau added to the 2021 Annual Business Survey (ABS) 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. In this article, we report the results of these questions—and how they differ by race and ethnicity. The survey finds that more than 60 percent of business experienced declines in sales. Fully one-third experienced significant declines. More than 70 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.

Key finding:

  1. The impact of the COVID-19 pandemic hit businesses hard. More than 60 percent of firms experienced declines in sales. Minority-owned firms felt a disproportionate negative impact from the COVID-19 pandemic.
  2. Minority-owned firms enter 2022 with weaker balance sheets and more questions over their ongoing viability than nonminority-owned firms.

Center Affiliation: Economic Survey Research Center

JEL classification: G21, L5, R3

Key words: COVID-19, racial equity, small business credit access


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