From left, Adrian Harris, Kina McFadden and Laneesha Senegal of Vision View Business Formation Center work often with small business.

published on February 3, 2021 - 2:37 PM
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The first round of the Paycheck Protection Program (PPP1) could be called a free-for-all of lending that benefited large, established businesses with existing banking relationships. Many small businesses without those resources were left to fend for themselves. Many were minority owned.

The U.S. Small Business Administration prioritized these minority-owned businesses last week by granting first access to Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), and Microloan Intermediaries to submit borrower applications.

And this time around, PPP2 includes aid specifically for minority-owned businesses.

Keshawna Nelson, owner of The Java Bar at 4974 E. Clinton Way in Fresno, wasn’t approved for a PPP1 loan, but she hopes to receive a PPP2 loan. The Java Bar has been open for two years, but has operated since 2017 catering coffee for events.

“I’m a coffee shop. Starbucks and Dutch Bros, they’re franchises and they’re huge. A small business like me who’s competing? You know I can’t,” Nelson said. “I’ve had to let three people go so far, so I’m down to two people. I can’t afford to stay open like these big franchises.”

She suggests that instead of skipping over small businesses with shaky credit, offer a credit course to keep businesses accountable with their loans.

“There are a lot of businesses in Fresno, small minority businesses who didn’t get it. I’ve heard several business owners saying that they didn’t get it,” Nelson said.

Although she didn’t score a PPP loan, she received an Economic Injury Disaster Loan Advance grant for $10,000 and a $5,000 grant from the Fresno Hispanic Foundation, which has kept her afloat through the start of 2021, but “I’m surviving, barely,” Nelson said.

“Some small businesses, they do 1099 instead of payroll, so I know those were some who didn’t get it,” Nelson said.

Laneesha Senegal, CEO of Vision View Business Formation Center in Fresno, said that some businesses don’t have the right infrastructure.

“Those long term savings, you know, the generational wealth investment — they don’t have the credit. What other ways can we be able to properly participate in the corporate infrastructure unless there is really a direct investment in these businesses?” Senegal said.

One step in the qualification for PPP was credit approval.

“When I first tried to apply for a loan for my business, I didn’t get approved for it because of my credit,” Nelson said. “The larger corporations, non-minority owned businesses — I mean they have [credit], so it’s easy to get this kind of money and then they stay in business.”

She has spent her time building her business out of pocket, putting her wages back into her business. She has also worked with a business consultant over the past year to boost her credit.

“I’ve been able to raise my credit score, but I have somebody that’s actually helping me with it. So if that’s the reasoning why a lot of the minority business owners aren’t getting it, let’s fix that. Let’s help them with their credit instead of passing them over,” Nelson said.

Senegal said that before the state Employment Development Department offered individuals the opportunity for unemployment assistance, some people were being referred to sign up for welfare assistance programs.

“Most of our businesses again were on 1099. There’s some that are on a cash basis, so they don’t really have the infrastructure, so they were shut out of the last PPP process,” Senegal said.

A lot of businesses took advantage of personal unemployment money, but not PPP.

Senegal said single-owner businesses like restaurants, salons, caretaking, and personal trucking and transportation companies had an especially difficult time.

“The rules were not written in those industries to really take advantage of that opportunity,” Senegal said.

But Senegal says she’s excited for this round, because the SBA has set aside funds for underserved businesses, including funds for independent contractors and sole proprietors.

Terance Frazier, CEO of TFS Investments, said, “I think the people are very cautious, because they have made a lot of promises, but by the time they get to the Valley, there’s a lot of road blocks.”

“The devil’s always in the details,” Frazier said.

Frazier received a PPP1 loan for TFS Investments, and said he had a great experience with that loan. But, he said he can understand the problems that some of the private sector has; Frazier owns seven private businesses and none of them received a PPP1 loan.

There are loopholes, he said. Too much or too little revenue can keep business owners from qualifying for PPP loans.

“You have to have a lot of employees, but the employees can’t work; if they’re not working how are they going to make money?” Frazier said.

“It’s generational; some minorities don’t have the proper paperwork, or they don’t have the right financials — little things like that will disqualify them,” Frazier said.

He said that policies are only good until they reach the people.

“I’m very skeptical when people say, ‘We’re helping minorities first,’” Frazier said.

Some businesses received as little as $500 or $600, whereas big corporations gained millions of dollars.

“Normally when you have a lot of our small, mom-and-pop shops, you have to remember they’re built on family-owned businesses, college students, volunteer basis — you know, you’re kind of growing your business organically because you don’t really have that investment or legacy wealth,” Senegal said.

Frazier said minority-owned businesses aren’t asking for special treatment; they just want the same opportunities, and don’t want to be disadvantaged. But he said the problem is compounded and multifaceted, so the solution will be as well.

Frazier says he is cautiously optimistic about PPP2 and putting minority-owned and underserved businesses first.

“You’re telling us this because you knew we were last,” Frazier said.

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