Second Round Of PPP Brings More Success For Some Minority-Owned Businesses
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When the Paycheck Protection Program rolled out in 2020, much of the money went to big businesses with previously established banking relationships.
So in February, the Biden administration announced updates to the second round of PPP loans. There were changes in eligibility and a two-week priority period for businesses with 20 or fewer employees. Lending institutions were also given a new formula to calculate loan amounts.
“We wanted to be sure that those who couldn't take advantage of PPP loans had a decent shot at doing so this year,” said Mike Arriola, acting district director of the North Carolina SBA office.
Arriola says it’s difficult to gauge how much money has gone to minority-owned businesses because business owners are not required to disclose their race on the application.
So far, 30% of loan recipients have identified their race and ethnicity during the second round. Nearly 10% are Black, 16% are white and almost 4% are Latinos.
At the Charlotte Mecklenburg Black Chamber of Commerce, Shanté Williams told WFAE in an email that she hasn’t gotten feedback from the chamber’s members about the second round. She says she doesn’t know of any business that applied during the two-week priority window.
But Arriola says the SBA has been working with local organizations to reach minority business owners.
“We have been very focused on reaching out to minority communities since the program started,” he said. “We teamed up with resource partners and stakeholders of all kinds to reach specifically minority communities.”
One partner is Prospera, a Charlotte group that supports Latino entrepreneurs. Its director, Jose Alvarez, says there’s been a big difference for this round.
During the first round of PPP, Prospera helped secure nine loans totaling $60,000 for Latino entrepreneurs in North Carolina. During the second round, 60 of the 70 applications have been accepted, totaling more than $750,000 in aid. Alvarez attributes that success to a combination of several factors.
“I think the changes helped in a way,” Alvarez said. “But at the end of the day, a year later, more people are aware of the program. And more organizations are working in unison to make sure and provide the culturally focused technical assistance to help them be able to secure these loans.”
Alvarez says a lot of Latino entrepreneurs were hesitant to apply last year. He says many were unaware that PPP loans could be forgiven. They didn’t want to go into debt during an economically uncertain time.
Now, more people are willing to apply. But Alvarez says Latino entrepreneurs still have had to work through cultural and language barriers.
“The Latino entrepreneur still needed that guidance and that assistance, that hand-holding to apply and successfully access these loans” he said.
Prospera has partnered with the Latin American Chamber of Commerce and the North Carolina SBA office to provide informational webinars and one-on-one support for Latino business owners.
“One positive result of this is the willingness of all organizations to work together to make sure and get the message to the end user,” Alvarez said.
Martha Uriostegui credits Prospera for helping her secure two PPP loans after being rejected last year.
When the pandemic first hit, Uriostegui says sales went down by 60% and she had to let go of her two employees.
It was the chamber, she says, that made her aware of financial relief options.
“Thank God we were members of the chamber," Uriostegui said. "They kept giving us information about what was going on and where we could go to receive support. That’s how we got connected with Prospera.”
She says having the organization’s help has made accessing this money a lot easier — that's money that has helped keep the business afloat.
“We pay our salaries from this business, that’s how we live. We’re employees and owners at the same time,” she said. “So we need this money to pay for our day-to-day expenses, and this money helped a lot.”
So far, North Carolina has secured more than $5 billion in loans. Business owners have until May 31 to submit their PPP applications.
Shanté Williams has been a member of WFAE's Community Advisory Board since 2019.