Minority-owned businesses have been particularly hard-hit during the Covid-19 emergency. To make bad matters worse, the federal government’s Paycheck Protection Program (PPP), established via the Small Business Administration as a short-term fix to help small businesses survive the economic shutdown, has failed to get money into the hands of many of these vulnerable entrepreneurs. Now, the available funds are beginning to run out.
But there is still a chance for a more positive outcome. If black and brown businesses act quickly, they can still access some of the remaining help. And a number of services have cropped up to help them do so.
I had to get educated on the topic last week, as Don Lemon and I prepared to interview billionaire investor and philanthropist Robert F. Smith on the second CNN “The Color of Covid” special
. Smith serves on the board of my criminal justice organization, the REFORM Alliance, so I know how smart and passionate he is about justice and opportunity for vulnerable communities. He did not disappoint.
After our on-air discussion, Smith told me urgently: “Every black-owned barbershop, nail salon, hair salon, restaurant, dentist’s office, lawyer’s office, doctor’s office, realtor and church need to apply — [this] week. The money is running out.”
Sure enough, after the interview, I was contacted by an overwhelming number of small business owners, asking for advice on how to access stimulus support.
So I hope the outline below is useful. If you’re a small business owner, sole proprietor, church or nonprofit, especially one of color, it’s important to get informed and act with urgency this week.
To qualify for a PPP loan, you must be a small business owner with fewer than 500 employees. Loan amounts
can be up to 2.5 times your average monthly payroll costs, up to $10 million. According to the SBA, the loan is forgivable if you keep paying your staff
in the first eight weeks of the loan and can document that you’ve used at least 75% of the borrowed money to pay them, and up to 25% for business expenses including leases, mortgage interest and utilities.
In other words, if you spend the money according to the program’s rules, you won’t have to pay this loan back.
Small businesses, sole proprietors, self-employed individuals, independent contractors, nonprofits, churches, veterans’ organizations and tribal concerns should start by contacting their lenders and asking about the PPP program specifically.
You can also access stimulus support through PayPal, Square, Intuit QuickBooks or other “fintech” (financial technology) providers.
If you don’t have a lender or fintech relationship, you can access help through the National Action Network
or the National Bankers Association
(use the “contact us” section and put “PPP” in the subject line, and a minority bank will contact you).
Stimulus loans are also available via Community Development Finance Institutions (CDFIs), and you can find one in your area on Opportunity Finance Network’s website (visit https://ofn.org/coronavirus
and click the blue bar that says “small business owners”).
Some heavy hitters are also stepping up to help out.
For example, Smith has directed a number of the companies owned by his firm, Vista Equity Partners, to help. One company, Finastra
, helped digitize a national network of CDFIs and Minority Depository Institutions (MDIs), and many of them are taking new loan applicants. Another company, Quick Base
, built a tool to help people determine their loan eligibility and find a lender.
Magic Johnson recently announced
that he is making $100 million available. He is offering loans through a partnership between EquiTrust Life Insurance Co., which he owns a majority stake in, and MBE Capital Partners, which specializes in financing minority-owned businesses.
Also last week, Twitter CEO Jack Dorsey
backed a stylist relief fund called #SaveTheSalon. Led by Mayvenn CEO Diishan Imira, this charitable drive aims to get some aid to black hair stylists who have lost all their income due to the pandemic. The fund has also attracted contributions from the Pritzker Family Foundation and the Schusterman Family Foundation.
All of these efforts are necessary for minority-owned businesses to survive — and critical for the nation. Minority communities are vital components of our cities and our country. And one of the most important steps is to get capital back into the businesses that serve those communities.
It should be considered one of our most urgent economic tasks to keep businesses alive in communities of color. I hope the resources above will help give them a fighting chance.