Minority Biz Owners Push For More PPP

As a second wave of the pandemic approaches and federal aid from this spring dries up, local Black and Hispanic small business owners turned to one of Connecticut’s U.S. senators with stories of struggle and resilience — and a plea for another round of government support.

A handful of minority business owners and economic development boosters opened up with personal and professional anecdotes — and specific suggestions for how the feds can help them and their peers — during a Friday afternoon socially-distanced roundtable with U.S. Sen. Richard Blumenthal.

The hour-and-a-half-long conversation took place in the basement meeting room of the 200 Orange St. municipal office building.

Local entrepreneurs like Alisa Bowens-Mercado of Rhythm Brewing Co. and Alisa’s House of Salsa and Marta Mera of Pan Del Cielo Bakery and Howard K. Hill of Howard K. Hill Funeral Services stressed to the federal legislator that minority-owned small businesses are in critical need of immediate financial support.

“I don’t want my 20-year [dance studio] business to end this year,” Bowens-Mercado said. ​“These are real businesses, and these are real people. We need the help now. We want to survive.”

Hill agreed, and said that the federal Paycheck Protection Program (PPP) that served as a lifeline for many small businesses did not take into account structural disadvantages faced by Black and brown communities.

While his businesses were able to secure PPP and federal Emergency Injury Disaster Loans (EIDL) relatively early on in the pandemic, he knows many local Black business owners who don’t even have a bank account, let alone ready access to a lawyer, an accountant, or a bank representative who could help them navigate the application process.

“I’d like to see us as a collective people begin to acknowledge and respect the humanity of Black people,” he said. That means funding another round of PPP, and making it more accessible and responsive to the needs of minority-owned businesses.

The conversation took place against a backdrop of desperate negotiations and political brinksmanship in Washington, DC, over six months after the passage of the $2.2 trillion CARES Act and less than one month before November’s general election.

The Democratic-controlled U.S. House of Representatives and Republican President Donald Trump are seeking compromise over a proposed $1.8 trillion federal relief package. Republican U.S. Senate Majority Leader Mitch McConnell, meanwhile, has said he is only interested in a $500 billion funding bill which includes many of the same provisions his own caucus balked at summer. Senate Democrats also shot down in September a proposed relief bill they saw as too watered down.

Caught in the crosshairs are local small businesses that have used up their PPP forgivable loans, if they were able to land any in the first place, that have seen sales plummet even as operating expenses remain fixed, and that are bracing for a possible second broad-scale economic shutdown in response to the current uptick in Covid-19 cases even as the state transitions into Phase 3 economic reopening.

“Most small businesses have opened, but their sales are very low,” said Spanish American Merchants Association Executive Director Julio Mendoza (pictured). ‘“They don’t know how long they’ll be able to stay open. If something is not done and not done quickly, you will see a lot more businesses closed for good.”

In addition to Blumenthal, Mayor Justin Elicker, and U.S. Small Business Administration Deputy Director Julio Casiano, the pandemic-era listening session included Bowens-Mercado, Hill, Mera, Mendoza, Ricardo Caliz of Beyond Home Care Staffing Service, Anne-Marie Knight of the Black Business Alliance, and Deborah Caviness of the Southern Connecticut Black Chamber of Commerce.

Casiano said that the SBA has given out in Connecticut a total of 64,629 PPP loans worth over $6.7 billion since the passage of the CARES Act at the end of March. It’s also given out 34,462 EIDL loans worth over $2 billion in that time. He said PPP recipients have until the end of December to spend their federal aid, and that the federal government is currently accepting applications for PPP loan forgiveness.

The first round of PPP closed to new loan applications on Aug. 8. Overall, the program saw roughly $520 billion in small business relief distributed nationwide, with an additional $130 billion-plus left unused.

“The Money Has Run Out”

Blumenthal kicked off the event by stating his legislative priorities based on previous, similar conversations he had recently had with other small business owners across the state.

“We need more PPP in a new bill,” he said. ​“And we need faster relief, and less waiting time for minority-owned businesses.”

He then opened the floor for each of the local small business owners present — spaced six feet apart at single-person desks, masks around their faces and a microphone standing before them — to weigh in with stories, suggestions, and words of wisdom for him to take back to ongoing negotiations in Washington, DC.

Bowens-Mercado said she is running not one business, but two: a salsa dance studio based out Westville that has been in New Haven for 20 years, and a craft beer brewing company she founded two years ago.

“In April, we received a PPP loan” for the dance studio, she said. ​“It was just enough to get us through the end of July.” She said that local arts community grants have helped sustain her dance business since the federal money ran out.

“Thank gracious for my arts community,” she said.

Bowens-Mercado said she reopened for classes at her dance studio earlier this month and has implemented such public health mandates as social distancing, temperature checks, and required mask-wearing.

“Every time I press the play button for music, my life is in danger,” she said. ​“I don’t want to get sick. I don’t want my students to get sick. But the money has run out.”

She called for another round of PPP or some other federal business support to help businesses like hers stay afloat during the pandemic.

“What We Need Is Grants”

Speaking in Spanish with Small Business Administration (SBA) Veterans Affairs Officer and longtime Fair Haven business promoter Frank Alvarado translating her words into English, Mera told the senator that she had to close her Ferry Street bakery for over two months after the pandemic hit in March.

“When we came back to open,” she said, ​“we didn’t have sufficient capital to implement all of the social distancing measures. We also lost all of our inventory.” And even though her business was closed, she still had to pay the same fixed costs for rent, water, and utilities as if she were open.

After Pan del Cielo reopened in June, the bakery was quickly able to bounce back in terms of how many baked goods it could make — but ​“sales did not come in as we hoped or expected.”

Mera (pictured) said she was able to obtain a PPP loan with the help of SAMA. While the banks she reached out offered little help, she said, SAMA’s Mendoza was able to help her navigate the application process. Mendoza said that SAMA forged a relationship with Liberty Bank early on in the pandemic, whereby the bank agreed to treat anyone passed along to them by SAMA as if they were an existing, commercial customer.

“Is your business coming back?” Blumenthal asked.

“Slowly,” Mera replied. She told the senator that she would like to see not just another round of PPP, but also federal business aid that came in the form of outright grants rather than forgivable loans.

“People are scared about getting loans, even if they’re low-interest loans,” said Knight (pictured).

She said her family is West Indian, and that taking out a loan for a business is an unfamiliar cultural concept to many in her community.

“What we need is grants,” she said.

Mendoza added that a new round of PPP should be tied not so much to payroll, but instead to operating costs. The first round of PPP initially offered forgivable loans for businesses with less than 500 employees that spent at least 75 percent of that money on payroll. Congress subsequently lowered that mandatory payroll threshold to 60 percent for a loan to be forgiven.

“A new PPP should be based on operating expenses,” he said. ​“That will really help small businesses.”

“Recognized, Respected, & Resourced”

Hill (pictured at left), who runs a funeral home in Dwight, told the senator that his business has had quite the opposite experience during the pandemic in comparison to Bowens-Mercado’s salsa studio and Mera’s bakery.

“Unfortunately, my business is thriving,” he said.

That has given him little comfort, he said, especially as he has seen such economic suffering among so many other fellow Black business owners in New Haven and in Hartford, where he focuses much of his community economic development efforts. In addition to running his own business, Hill is also the vice chairman of the Greater New Haven Chamber of Commerce, the founder of the Black Business Alliance, and a co-chair of the state Department of Economic and Community Development (DECD) Minority Business Initiative Committee.

He stressed the structural barriers — what he called a ​“perfect concoction” of factors — that led to PPP not reaching as many Black small business owners as it should have.

Those included some of his peers not having bank accounts, not having easy access to lawyers and accountants, and not having pre-existing relationships with banks. He said that the intermediaries charged with doing outreach to the Black community about the availability of federal aid rarely have the cultural competency or context necessary to successfully sign people up.

SAMA was able to do exactly that with many members of the local Hispanic community, he said. The federal government needs to prioritize establishing similar relationships with Black business groups if it wants a subsequent round of aid to actually make it into the hands of those who need it.

“I’m hopeful that Black businesses and organizations will be recognized, respected, and resourced,” he said.

Casiano (pictured) said one potential solution would be for the state and federal governments to expand the SBA’s microlending program in Connecticut.

Currently, only three organizations statewide, including HEDCO, are authorized to act as direct lenders on behalf of the federal small business agency. Setting up more agencies like SAMA or the Black Business Alliance to serve in as federal microlenders could satisfy that very need, he said, to make sure that culturally competent intermediaries are getting the word out — and the money out — regarding federal aid.