The Columbus Urban League is hoping that the second round of Paycheck Protection Program loans are more equitably distributed to minority-owned businesses.
And it’s prepared to help ensure that by making connections between banks and such small businesses in the Columbus area.
“Many Black business owners don’t have strong relationships with their banks or any relationship at all,” Urban League CEO Stephanie Hightower said in a news release. “We can help these companies prepare and submit the proper documentation, match them with lenders likely to respond to their requests, and then serve as their advocate throughout the process.”
Congress late last year approved $284 billion in new PPP funding as part of the new Covid relief package. The first round of the program gave out $523 billion in PPP loans to 5.2 million small businesses.
Several studies and news organizations have pointed out the inequities of the first round of PPP: The Brookings Institution foundation that PPP loans in majority-minority neighborhoods were approved later than those in majority-white neighborhoods.
Reuters found that congressional districts with high Black populations got billions less in PPP loans than those with smaller Black populations.
It’s hard to ascertain the exact demographics of PPP recipients. The application form for the program did not initially ask about the race or ethnicity of borrowers, although some banks did collect that information.
This time around, banks appear to be reaching out more proactively to help serve minority-owned businesses, said J. Averi Frost, program manager with the Urban League.
“The first time around, we went to them first, and now they’re coming to us first, which is pretty cool,” Frost said. “I think the work we did last year really did create some relationships. Perhaps they saw this as good business. Also, maybe (it’s) altruistic, given everything that’s going on. The banks can see that they could be helpful.
Frost said “there’s been a ton of interest” in the second round of the program from local small businesses.
“We’ve been getting calls and emails all day from businesses who are interested in applying for the program,” Frost said Tuesday. “Three-quarters of them, if not more, haven’t received PPP (funds) before.”
Frost encouraged small businesses not to assume they are ineligible, but instead research the program or call the Urban League for help navigating it.
“Don’t disqualify yourself,” Frost said. “Let’s do a deeper dive to see if you’re eligible. Hopefully we’re going to see better outcomes.”
Since the pandemic started, the Columbus Urban League says it has “connected with more than 4,000 Black enterprises and … tapped into $7.6 million in funding and created or saved 1,250 jobs.”
“We are taking a comprehensive approach to working with and for Black businesses,” Hightower said in the release. “Count on us to offer professional, thoughtful guidance on everything from earning certification as a state of Ohio vendor to finding marketing, legal, management and other professional services and developing a plan for success in a post-Covid economy. Everything we do is designed to support immediate recovery, drive systemic reform and ensure long-term resiliency.”
