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PPP loans for minority-owned businesses
FOX 26's Heather Sullivan has more on what some minority-owned businesses can do to apply for PPP.
HOUSTON - Small businesses were able to begin applying today for the new round of Paycheck Protection Program, or PPP, loans worth $284 billion.
This time, the Small Business Administration says it is directing the loans to help more minority-owned businesses after so many struggled to get the first PPP loans.
The National Bureau of Economic Research found 41% of Black-owned businesses faced closure last year. The Associated Press reports thousands of minority-owned businesses were among the last to receive the first round of PPP loans, or struggled to get any.
"I'm not going to lie, it was a bit confusing and difficult," said Ariel Williams.
Williams had to apply to three banks before her web design business, Gravitt8 Development, was finally approved for a PPP loan.
"For me, when I was applying at the first bank I went to, it was like, 'We're full, we're sorry, we can't help you," said Williams.
Khaliah Guillory said her PPP loan for her Nap Bar business was smaller than expected, as she needed to temporarily close her doors for the pandemic and pivot to selling Better Sleep Boxes online.
"Don't get me wrong. I come from the idealogy that oatmeal is better than no meal. But I was underwhelmed with the amount of the meal that I received," said Guillory.
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Chiropractor Dr. Alexia McClurkin says her PPP loan kept her practice, Sports and Wellness Doc, afloat.
"I was able to pay the rent for the office and pay the staff," said McClurkin.
But she says she knows other business owners who were not so lucky.
"I have a lot of friends who are minority-owned business owners, who did not get any funding at all, even after trying several times," she said.
PPP loan data analysis by the Associated Press reveals thousands of minority-owned businesses, which are among the hardest hit in the pandemic, waited months to receive their loans or struggled to find lenders that would approve them.
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"Women companies of color, they accounted for 89% of all women-owned businesses that were started. So I started thinking, my gosh, there was a huge funding disparity in the middle of the biggest pandemic that all of us have seen," reacts Guillory.
Ami Kassar, CEO of business loan advisory firm MultiFunding, believes the problem was due to a lack of the SBA educating minority business owners on how to apply.
"They didn't know where to go, they didn't know what to do, they weren't sure about how to proceed. Many of them didn't realize they were eligible for it," said Kassar.
Williams agrees.
"You have some businesses that didn't even apply because they thought, 'Hey, it's not even worth it, I'm not going to get it," said Williams.
To address the issue, the Small Business Administration is re-opening the PPP loan portal to smaller lenders, such as community banks and credit unions, which typically serve more minority communities, for the first two days of applications. The portal will fully open Tuesday, January 19 to all PPP lenders.
"Those areas are underserved. Those are the people that actually need it," responded McClurkin.
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Kassar recommends small business owners contact the SBA and multiple lenders to learn which loans are available and how to apply.
"Go to your banker, ask them to explain to you what you're eligible for," said Kassar.
Learn more at the SBA website and the U.S. Treasury.