ARPA Underestimated Business Finance Program

2021 Big Ideas for Small Business: A Five-step Roadmap for Rebuilding the U.S. Small- business Sector, reviving entrepreneurship, and closing the racial wealth gap”, published by Drexel University and Yale, “The COVID-19 crisis has devastated Main Street small businesses across America. Since February 2020, almost a quarter of all U.S. small businesses have closed at least temporarily. In the hardest hit sectors, like restaurants, hotels, and retail, the numbers are far higher. In September 2020, Yelp reported that for businesses on its platform, more than half (60%) of closures were permanent. According to Womply data, it has been estimated that 185,000 small businesses — one in seven nationally — had shut down permanently by the end of August 2020. Those closures have left millions of Americans out of work and transformed lively neighborhoods around the country into retail ghost towns, destroying the wealth built by many families over generations in the process. In 2021, the Multicultural Development Center of Iowa, Greater Iowa City Inc., (formerly the Iowa City Area Development Group and the Iowa City Area Business Partnership) and GreenState Credit Union commissioned an Inclusive Economic Development Plan in Johnson County. This plan generated baseline data for understanding the impacts of COVID-19 on locally owned, underestimated businesses (‘underestimated’ is used here to include Black, Indigenous, People of Color, People with Disabilities, Immigrants, and LGBTQ+ people), through multilingual, online, and in-person surveys, phone calls, and several locally-lead focus groups. This plan also included federally reported data from two local banks, Midwest One Bank and GreenState Credit Union, to identify and understand lending practices to underestimated businesses, particularly during the beginning of the COVID-19 pandemic. A stark difference identified was the disparity between small businesses that received funding