Black Business Owners Turned to Fintech to Get U.S. Pandemic Aid

Black-owned businesses were much likelier than their peers to use online lenders than traditional banks when applying for U.S. pandemic relief loans, according to a study by the Federal Reserve Bank of New York.

About one in four Black owners seeking a Paycheck Protection Program loan applied to a fintech company, more than twice the rate of Whites, Asians and Hispanics, the New York Fed said in a blog post, part of its Economic Inequality series.

The reasons behind the findings have been well-documented. Minority-owned businesses have historically been underserved by the traditional banking system. Many were shut ...