Support for LAist comes from
We Explain L.A.
Stay Connected

Share This


In LA County, Most Coronavirus Bailout Loans Went To Westside Businesses

A framing art gallery is closed in Venice Beach during the COVID-19 novel coronavirus on April 1, 2020. (Apu Gomes/AFP via Getty Images)
Support your source for local news!
Today, put a dollar value on the trustworthy reporting you rely on all year long. The local news you read here every day is crafted for you, but right now, we need your help to keep it going. In these uncertain times, your support is even more important. We can't hold those in power accountable and uplift voices from the community without your partnership. Thank you.

Our news is free on LAist. To make sure you get our coverage: Sign up for our daily coronavirus newsletter. To support our nonprofit public service journalism: Donate now.

By Emily Guerin and Aaron Mendelson

Wealthier, whiter areas of L.A. County received far more Paycheck Protection Program loans than lower-income areas where residents are primarily people of color, according to a KPCC/LAist analysis of new data released by the Small Business Administration this week.

Congress created the loans as part of the federal coronavirus stimulus package passed in March. They were designed to help struggling small businesses, and are forgivable if used primarily to pay employees and basic expenses.

Support for LAist comes from

In L.A. County, businesses in the 33rd Congressional District, which stretches along the coast from Malibu to Palos Verdes, received the most PPP loans. This district is 62% white and has a median household income of $114,000, according to census data.

The 33rd District received 12 times as many loans as the 44th District, which includes communities like Compton, Carson and San Pedro. That district is nearly three-quarters Latino and has a median household income of around $53,000.


From the beginning, the Paycheck Protection Program was fraught with inequity. Despite being described as first come, first served, many banks prioritized their wealthiest customers first. Many large, publicly traded companies received large loans, as panicked small business owners tried, and failed, to apply for help.


Get our daily newsletters for the latest on COVID-19 and other top local headlines.

Terms of Use and Privacy Policy

SBA did not collect demographic data on the majority of loan recipients. But many people worried the loan program was simply not designed to help immigrant, Latino or Black business owners.

Support for LAist comes from

"The bias of the PPP since Day 1 has been towards lending into larger 'small' businesses and more white-owned small businesses," said Sean Salas, CEO of Camino Financial, an L.A.-based lender that works primarily with Latino entrepreneurs.


Part of the problem was how the money was distributed. In an effort to get the loans out quickly, SBA authorized banks, credit unions and other community lending institutions to make PPP loans on their behalf. But banks madethe vast majority of loans, and frequently required borrowers to be existing customers. It wasn't until the second round of PPP loans that a chunk of funding was specifically assigned to community lending institutions, which are more likely to serve lower-income clients.

"That disproportionately made it more challenging for low-income entrepreneurs, particularly those of color in underbanked communities or industries, to access the capital," said Bill Allen, CEO of the Los Angeles County Economic Development Corporation (LAEDC).

When Salas, of Camino Financial, surveyed his clients, he found 69% believed they simply wouldn't qualify for the PPP, and 19% needed assistance to complete the application.

He blames the U.S. Treasury's constantly changing loan guidelines, and the fact that undocumented immigrants were ineligible.

"The headline is: They're discouraged to apply. Period," he said. "They didn't know how to complete the application accurately, and they got scared, and they preferred just not to complete it."


But there is another way to read the data: The areas that got the most loans have the highest concentration of jobs and businesses in L.A. County.

"Part of what we're seeing is that disconnect between where people live and where people work," said Tyler Laferriere, an associate economist at the LAEDC's Institute for Applied Economics.

The more affordable parts of the county, like South and East L.A., have fewer jobs. But the parts of the county with more jobs, like the Westside, South Bay or Beverly Hills, are less affordable.


When we broke down the loan data by industry, we found that the industries that received the most loans largely reflect employment trends in L.A. County.

Full-service restaurants received by far the largest number of loans over $150,000. The leisure and hospitality sector is the county's third largest, employing just over 545,000 people, according to the Bureau of Labor Statistics.

But for smaller loans of less than $150,000, the offices of doctors, lawyers and dentists received the most loans. Health care is the county's largest job sector, employing just over 724,000 people, followed by professional and business services, which includes lawyers.

Most Read