Relief is coming for Black-owned businesses that have been severely impacted by the coronavirus crisis.
The Pennsylvania Department of Community and Economic Development established a $100 million Historically Disadvantaged Business Revitalization Program for small businesses that experienced loss as a result of the business closure order. The measure is part of an overall $225 million state initiative to provide COVID-19 relief to small businesses.
The program for disadvantaged businesses was spearheaded by state Sens. Art Haywood, Vincent Hughes, Sharif Street and Anthony Williams.
“What this program underscores is continued division between Black people and access in America,” Williams said during an interview with the Tribune.
“This was carved out specifically because many of these folks who operate in these communities do not have banking relationships. The large banks do not give them access specifically because of where they are operating and what they are operating in. They have not been able to access capital at the level that they need it.”
The program provides grants targeted to socially and economically disadvantaged individuals who own at least a 51% interest and control management of the daily business operations. Neighborhood microbusinesses — such as auto repair shops, barbershops, beauty salons and restaurants — can receive grants ranging from $5,000 to $50,000.
The grants will be processed by 17 Community Development Financial Institutions (CDFIs) in Pennsylvania, including Beech Companies, The Enterprise Center, the West Philadelphia Financial Services Institute and United Bank of Philadelphia.
Haywood said state officials opted to work with the CDFIs because major banks have a history of denying Black people home loans and business lines of credit.
“These CDFIs are much more accountable to us and have a much better record with us and that’s why we went with them,” he said. “We have created a process for getting the money that will really help our communities and this selections of CDFIs as a place for applications is critical for access.”
The new measure comes as the U.S. Small Business Administration’s Paycheck Protection Program has been criticized for not effectively reaching the nation’s minority-owned businesses.
Street underscored the importance of ensuring that those businesses receive targeted assistance.
“The reality is that economic recovery in our community is going to involve a lot of small businesses that we own,” he said. “It is critically important that we make money available to target small and disadvantaged businesses and we do it through a mechanism where businesses can really get those resources.”
Some of the businesses located in Philadelphia’s commercial corridors sustained damage during the protests and looting that followed the death of George Floyd.
“Some of those businesses may have been underinsured and the reality is that they were already hurting from COVID and now they have additional losses,” Street said. “Having some semblance of resources to help them get back on their feet could sort of reinvigorate our commercial corridors in a way that is critically needed if those corridors are going to survive.”
Hughes said state officials are challenging the private sector and the philanthropic sector to help small businesses in disadvantaged communities.
“This is a way to really breathe life into communities that have been devastated by COVID-19. The devastation is largely from the previous neglect that occurred before COVID-19 and when COVID-19 hit it became much worse,” he said.
A collective of barbershops and salon owners weighed in on the program’s development. The state’s barbershops and salon owners have been putting pressure on local elected officials to ensure that their concerns are heard.
“There are multiple layers of damages being done to our businesses,” said Kenny Duncan, a master barber and co-owner of the Main Attraction Unisex Salon.
He said the state’s barbershop and salon owners need assistance to recover because they don’t know when they will be able to reopen.
“The industry is in need of help, so the disbursement of funds needs to be adequate to sustain a large amount of businesses that have the most influence on constituents,” Duncan said.
The application process for the program is slated to open before the end of June. Eligible businesses with 25 or fewer employees may receive a maximum grant of $50,000 so long as the business was in operation on Feb. 15, 2020, and, if required, paid income taxes to the state and federal government, as reported on individual or business tax returns.