Why bother? A question of small black businesses during the COVID-19 crisis
by Lin Robertson
Some small minority-owned businesses have taken the time to apply for the Economic Disaster Loan (EIDL) before the original deadline of March 31, 2020 and then again thereafter. EIDL’s Disaster Lending Program was intended to provide working capital to small businesses – apparently not exclusively – with funding of up to $ 2 million, including an immediate advance of $ 10,000 within days. submitting applications to the Small Business Administration (SBA).
To be eligible for EIDL assistance, small businesses had to be economically prejudiced and located in a county that had been declared a disaster. So one would think that small businesses like the ones on Third Street at Bayview Hunters Point would actually be ideal loan seekers, right? Not so fast.
To qualify, EIDL loan applicants had to first pass a credit check. And while the SBA has given little guidance on what credit scores would be considered “acceptable to the SBA,” small businesses could be turned down if they didn’t have good business credit. The SBA also took into account other factors such as your history with rent, utilities, insurance, and other bill payments.
In other words, if you were already a struggling business, you were less likely to get help from EIDL to survive the COVID-19 pandemic crisis.
Small minority-owned businesses across the country have recently received rejection letters with the notification that they have an “unsatisfactory credit history”. Many never received the $ 10,000 advance that was supposed to be used as a grant even if you were refused the loan. They also did not receive a single $ 1,000 per employee for micro-businesses or self-employed workers instead of the $ 10,000 loan advance. And good luck getting a rollover after turning down the EIDL loan six months later.
Some small black-owned businesses in Bayview recently reported that they had in fact not applied for EIDL loans to continue during these tough economic times. When asked why not, their response was, “Why bother? ”
Very few even knew where to go to seek financial assistance from the federal government – or for that matter from state or local agencies supposedly charged with serving their specific communities. No outreach effort to show minorities how to seek or receive financial assistance for businesses like the ones on Third Street is not evident in their community either. While it is not yet clear to anyone in the SBA reading this article, our message is simple: “Help! “
The Mayor of London Breed’s COVID-19 Economic Recovery Task Force – Office of Economic Development and Workforce – offers small loans, grants and fee deferrals that could help restart the economy for all of its constituents, including Bayview Small Businesses.
“We’re on our own,” says Bridget Carter, owner of California First Management, which has self-funded her affordable housing management business for years and serves many needy people in San Francisco County. Ironically, his property management company was also not eligible to apply for a P3 loan to cover payroll, even though many of his tenants cannot afford their rent at the moment. Yet like so many strong black female entrepreneurs who have faced tough times before, Ms. Carter never gives up.
ABU community advocate James Richards also sent a letter to Governor Gavin Newsom last month. His hope was that Newsom would call on banks and other institutions to do more for black-owned businesses. Has his request fallen on deaf ears yet? So far, no word from the Newsom administration in response to Richards’ letter.
What are federal, state and local agencies doing to help us resurrect today? Richards points to the only source of support he is aware of in San Francisco – the London Breed Mayor’s COVID-19 Economic Recovery Task Force led by Joaquín Torres, director of the Office of Economic Development and Workforce . The Town is offering small loans, grants and deferrals that could help jumpstart the economy for all of its constituents, including small businesses in Bayview.
While Richards is grateful for these types of initiatives in San Francisco, he recognizes that these opportunities are for minimal amounts. He believes the SBA in particular should reach out and be present in his community to help small businesses and minority-owned businesses get the financial help they need. Teach us how to fish and show us how we could benefit from programs to help targeted economies recover more effectively.
“We are dying on both sides. Richards points out that while African Americans seem to be hit hardest by the coronavirus, not enough is being done to provide us with financial support so that we can also survive the current economic crisis. “The runoff is just not reaching us.”
More information on the follow-up to this article is to come as we get additional feedback from Bayview businesses and other community stakeholders. To this end, we invite you to give us your point of view in response to the question “why not” bother?
Lin Robertson began his career starting the Aruba Foreign Investment Agency in his hometown of Aruba, a Caribbean island nation off the coast of Venezuela. Arriving in California in 1998, she worked with the San Jose Office of Equality Assurance and in 2005 founded The Labor Compliance Managers, of which she is the CEO. She is also a senior producer for International media television. Lin can be reached at [email protected]. This story is part of a series on the reversal of black emigration from San Francisco funded by Fred Jordan of the African American Chamber of Commerce in San Francisco.