I-Team: New Effort To Make Sure Minority-Owned Businesses Get Fair Share Of PPP Loans
BOSTON (CBS) - The Payroll Protection Program was designed to keep entrepreneurs afloat with loans during the COVID pandemic.
Partnering with students from Boston University's Justice Media co-Lab, the I-Team found some minority owned small businesses, like Sweet Teez Bakery in Boston, were left out of the program and didn't get the money they needed.
Owner Teresa Maynard says, "It was pretty devastating. We were closed for seven months."
The pandemic was especially tough on small businesses who were struggling during COVID.
"I was super excited," Maynard said when she learned about the Small Business Administration PPP loans. "People put all their hopes and dreams in these businesses and everything just stopped we needed help."
But Teresa and many others say the process was frustrating and complicated.
"The small mom and pop shops, the businesses of color were neglected in that first round of PPP, it just wasn't for us," Maynard said.
The I-Team, along with students from Boston University, dug into the SBA data comparing it to the list of self-reported, certified minority owned businesses in Boston. Our investigation showed that out of the 2,029 SBA loans given to Boston businesses last spring, only 24 went to certified minority owned businesses.
Karen Kelleher of LISC, a community advocacy group, tells the I-Team it quickly realized that with the next round of funding the outcome needed to change.
Seeing the need, a coalition formed the Massachusetts Equitable PPP Access Initiative and so far it has helped 500 entrepreneurs get about $7 million in government funding. Kelleher said every dollar makes a difference for these businesses who are the lifeblood of their communities in so many cases.
Massage therapist Christine Rose is one of those businesses. She was out of work for months last year. With the help of the initiative, she qualified for a PPP loan.
Rose said she had gone through all of her savings when she applied for the loan, which she got within 72 hours. She was lined up with a bank and says she plans to keep the relationship the lender.
THE SBA now has a new program, this time it is limited to borrowers with less than 20 employees. A perfect fit for Teresa Maynard who says she applying. "I'm excited about this round of PPP," she said. "A little nervous because you never know, but I feel more hopeful."
The SBA says it cannot legally require borrowers to provide demographic information and it tells us more than 75% of borrowers did not, making it difficult to accurately know how many minority businesses may have received the government loans.
The SBA Payroll Protection loan program is open for applications until March 31.
This project was a partnership with Boston University's Justice Media Computational Journalism co-lab, a collaboration between BU Spark!, an incubator and experiential learning lab for computer science and engineering projects and the College of Communication.