Local Emergency Funding Is Bypassing Many Black Businesses, Entrepreneurs Say

Apr 30, 2020

A woman walks her dog past a closed business, Wednesday, April 29, 2020, in Chagrin Falls, Ohio.
Credit Tony Dejak / AP Photo

Some African-American businesses in Kalamazoo have asked for an emergency loan. But many firms are not getting the help they need during the shutdown, say Nicole Parker, co-founder of Sisters in Business, and Nicole Triplett, founder of Black Wall Street Kalamazoo. Both groups promote African-American entrepreneurship in the Kalamazoo area.


Parker and Triplett have raised concerns through two waves of local or locally administered aid – grants overseen by Southwest Michigan First, with funds from the Michigan Economic Development Corporation, and an emergency loan program of the City of Kalamazoo and United Way. Parker and Triplett say the grants largely bypassed the businesses they work with, and that loans are not a viable option for many owners.

The MEDC grants targeted businesses in the downtown and commercial centers, according to Ron Kitchens, CEO of Southwest Michigan First. Parker and Triplett say only a few black-owned businesses are established there. Eligibility also depended in part on the number of employees. But many African-American enterprises are “microbusinesses,” Parker said, rather than significant employers.

Loans

The city and United Way released data on its loan participation program this week, noting that of the 85 percent of recipients who disclosed their race, about six percent were black. Roughly 70 percent were white, four percent were Hispanic and another four percent were Asian.

Parker said she’s “not surprised” by those figures.

“Many individuals in our networks who we have talked with and or surveyed were extremely hesitant to apply for loans even before the pandemic and more so now because of concerns of taking on debt. A few of the Black businesses I see on the list are those more established businesses,” she wrote in an email to WMUK.

The figures “align with the existing trends and statistics on a local and national level that continue to show how Black and other minority businesses are disproportionately unable to access funding,” she added.

That lack of equity did not start with the COVID-19 crisis. “We already had a gap in regards to access to funding. An economic gap anyway, a wealth gap anyway, so COVID has just made that gap even wider,” she said.

Solutions

On the other hand, Triplett and Parker agreed that even small grants and forgivable loans can make a big difference if they’re well-targeted.

Several private efforts, SheaMoisture’s New Voices Fund, Backstage Capital and Digital Undivided’s Doonie Fund have effective initiatives to support minority-owned businesses, Parker said.

Doonie is “a smaller fund but this organization was very intentional to say, ‘We recognize that there is a gap, and we need to make sure that we have intentional funding that’s going out to black women,’” Parker said.

“On a local level that is what we are trying to push, that conversation,” she said. “’What targeted initiatives are we going to do?’”

Parker says it’ll take a targeted effort to get the most vulnerable businesses through the shutdown.

Triplett noted the public outcry over not-so-small businesses such as Ruth’s Chris Steak House qualifying for federal Paycheck Protection Program loans (the company later said it would give the money back).

“We would like to see that same type of pressure and change, that same type of tenacity be put forth towards our black businesses,” Triplett said.

“When you apply for a fund” such as Doonie, she added, “that was a smaller fund, a microgrant, however it was intentional,” she added. “It levels the playing field. It increases the chance that that specific population within the target will have access to those funds.”

“If you’re really wanting to address crisis then we can’t continue to be an afterthought,” Triplett said.