How Do Minority Owned Businesses Recover Without PPP Loans?
For many small business owners, PPP loans from the federal government were a lifesaver.
That Paycheck Protection Program money was right on time and picture perfect for a lot of people.
For a lot of white people, that is. Many Black and Hispanic businesses didn’t get paid that way.
And if you didn’t get one of the 11.8 million PPP loans approved across the country, you probably tried for a traditional bank loan or grant to keep your small business or non-profit running. That's still hard if you are a person of color.
Carol Reese is a small business coach and strategist in Richmond, Virginia.
“My granddaughter is nine. I want, when she becomes a young lady, that she can walk into any financial institution and get a loan based on what she has done and not a challenging credit system that already is not built for minorities or people of color," said Carol Reese, CEO of ReeSources Inc.
Reese's job is to keep small businesses in business by helping to modernize the front and back office, but during the pandemic when it was time for her to get some help, it didn’t come.
"I did not get any of the PPP money," she said.
One problem: the PPP loan was designed to fund payrolls, and the majority of Black businesses have few, if any, employees.
I met Carol Reese earlier this month in the quaint Village of Pinehurst, N.C. I hear that’s where golf is played and deals are made. We were attending an Executive Networking Conference sponsored by the National Institute of Minority Economic Development.
We socially distanced on the front porch in rocking chairs, discussing why so many Black businesses didn’t survive the pandemic and what could be done about it.
Vicki Lee Parker-High, the Executive Director of the North Carolina Business Council, joined us on the porch.
"We can no longer use the old myths and excuses; 'they’re bad investments' or 'Black businesses don’t have the experience, they don’t have the credit,'" Parker-High said.
"PPP was a level-playing field. There was no credit report they had to give up. There was no other criteria other than to apply... So those numbers should have been even. You weren’t looking at judging them on these standard criteria. So that clearly shows us and tells us, a story as Black people we’ve seen for a long, long time, that you are treated differently because of the color of your skin."
Parker-High said the North Carolina Business Council got both rounds of PPP loans because of who she knew in the financial sector.
"Let’s be clear, I am a Black woman, but they were white. We’ve known each other for years," Parker-High said. "I know that can sometimes sound challenging, but we have to get used to talking with people. Black people have to get used to talking to people who don’t look like them as well."
Reese said she wants questions about race removed from small business loan applications, going forward.
"The other thing is, I want businesses to be scaled on what they do, not what you think they may not do," Reese said. "I want us to be one people.”