Small businesses hurt by the coronavirus pandemic can start applying for another round of federal loans this week.
Congress passed a stimulus package last month that includes $284 billion to replenish the Paycheck Protection Program. More than 5 million businesses received a loan last year.
But data show small businesses in communities of color had unequal access to those loans, according to an analysis last year by the Brookings Institution. The reasoning ranged from outright lending discrimination to a lack of access to banking and other financial services.
Small-business consultant Erica Henderson is trying to change that this time around.
She’s working with community organizations to provide free help for Black-owned and other minority-owned businesses in the St. Louis region. Henderson previously oversaw small business resource programs at the St. Louis Economic Development Partnership.
“Nationally, we talked about the fact that Black and brown businesses, women-owned businesses, immigrant-owned businesses were not at the front of the line,” she said. “They were not the businesses who received the assistance, which is in essence, who really needed it.”
Henderson is working with the St. Louis Small Business Empowerment Center and other groups to launch a webinar series next week where business owners can ask questions about the federal loan application process.
“If you’re not a traditional person who thinks about putting a loan document together, that’s not what you do on a regular basis, it can be overwhelming and intimidating,” she said. “And so you want to be able to connect with someone who can help you with that — and no question is a dumb question.”
To be eligible for a loan, businesses must show at least a 25% revenue drop in any quarter of 2020. Businesses that already received a PPP loan are allowed to apply again.
Henderson is also working with business owners one-on-one to make sure they have the proper documentation in order, such as a business license, tax documents and proof of expenses for payroll and personal protective equipment.
She’s been helping Michele Smith-Walker, who wrapped up her application for another PPP loan on Tuesday to support her Florissant-based bar and grill, called Holeshotz.
Smith-Walker has had to beef up the food side of her business and split shifts to make sure all her employees are able to take home a paycheck. She said figuring out the PPP application process wasn’t easy while trying to keep a bar in business during a pandemic.
“It’s actually better this way because [Henderson] can help me understand the proper verbage to use in the scenario to allow us to get the money. Otherwise, we wouldn’t know,” she said.
Smith-Walker received a $12,500 loan last year, but she said it only covered about a month of payroll. She’s hoping another loan will buy her more time until restrictions loosen up.
“Every little bit helps, but would it recover, recover? No, because you just so far behind, you just constantly trying to catch up,” she said.
The Brookings Institution also found that Black business owners were more likely to be denied PPP loans than their white counterparts with similar application profiles.
Sequoia Massey, who goes by Foxi, didn’t get many details about why the government denied her PPP loan application last year, and now she’s wary of applying again.
The Florissant native, who recently moved to Arizona, had hoped to get some money to help pivot her eyebrow business, Foxi iBrows, from in-person appointments to online product sales.
She said her business is down and she could use the money to hire contractors to improve her website and marketing presence, but she’s frustrated by how difficult the process was for her.
“That’s why it was discouraging, because it wasn’t just the denial. It was, when you try to call to figure out the appeal process, nothing was clear,” she said.
Massey gave up after calling a few times without getting answers and picked up another job to keep her business afloat.
“I can't sit around and wait for them,” she said. “Life still goes on, and my son needs to eat.”
Massey is skeptical the program is truly benefiting small-business owners like herself. But, she said one of her family members is pushing her not to give up this time.
You can find more information about free resources for small business owners interested in applying for a PPP loan on the St. Louis Small Business Empowerment Center’s website.
Follow Corinne on Twitter: @corinnesusan
