The Paycheck Protection Program allegedly discriminated against woman- and minority-owned businesses by prioritizing businesses with employees, according to a lawsuit filed by Maryland business owners on Friday.
The lawsuit claims the loan program allowed businesses with employees to apply for emergency funds before businesses without employees — which the suit claims are disproportionately owned by women and minorities, according to Reuters.
The suit also accuses the U.S. Treasury Department and Small Business Administration (SBA) of violating equal protection under the Constitution and seeks class-action damages on behalf of all woman- and minority-owned businesses without employees. The SBA recently released guidance for self-employed applicants on April 14, but the program ran out of funds on April 16.
Yesterday, Congress approved a bill for a second round of coronavirus relief, which would add $310 billion to the small business lending program. Per Reuters, Democratic leader Chuck Schumer (D-NY) said that $125 billion of the newly approved small business funds will go to “mom and pop” and minority-owned stores.