Of the 2,669 Paycheck Protection Program loans awarded in Boone County, six went to businesses identifying themselves as Black-owned.
Seven went to businesses listed as being owned by American Indians. Eight were awarded to businesses identifying themselves as Hispanic-owned. Twenty-one businesses identified as being Asian-owned received the loans.
And 558 were provided to white-owned businesses.
Minority-owned businesses have felt left out of the loans around the country, including Kansas City, in Massachusetts and Detroit.
“It was one of those programs that was implemented without a lot of information beforehand,” said Keith McIver, president of the Minority Men’s Network in Columbia.
The program was established as an incentive for businesses to keep employees on the payroll during the pandemic. The loans can be forgiven if businesses maintain employee and salary levels.
The Small Business Administration recently released data naming companies that obtained loans greater than $150,000. For loans below that amount, the release gave information including jobs numbers, industry, and owner ethnicity.
The data on ethnicity is only being collected on a voluntary basis when borrowers apply for their loans to be written off. There were 2,099 loans for race or ethnicity of the owner is listed as “unanswered,” so the numbers may be higher.
The six PPP loans approved for businesses identifying as Black-owned in Boone County, all were under $150,000, so they were not listed by business name. The total for all the loans was $243,166, resulting in 23 jobs retained.
Among businesses identifying as Hispanic-owned, seven were under $150,000 and one was over $150,000. The loan over $150,000 was in the $350,000 to $1 million range to Gastrointestinal Associates,. resulting in 48 jobs retained
Among the others seven under $150,000, the loan total was $285,500, with 34 jobs retained.
Self-identified American Indian-owned businesses were awarded three loans greater than $150,000 and four under $150,000. The loans to Columbia Curb & Gutter Co., Bell Contracting Inc. and KCP Hospitality Inc. retained 94 jobs.
The four loans to businesses under $150,000 totaled $220,500 and retained 50 jobs.
Among PPP loans to businesses indicating they have Asian owners, the single loan over $150,000 was to Missouri Cancer Associates in the range of $1 million to $2 million. It retained 135 jobs.
Twenty Asian-owned businesses received PPP loans under $150,000. They totaled $657,156 and retained 180 jobs.
All the PPP loans under $150,000 in Boone County totaled nearly $78 million. Among them, the 447 businesses identifying as white-owned received loans totaling $18.5 million and retained 3,120 jobs.
Minority business owners sometimes don’t have the access to banks that white owners have, McIver said.
“In Columbia, minority businesses sometimes don’t have the resources to apply,” McIver said. “They don’t always have involvement with local banks that facilitate loans. Other owners had lawyers to help them. Having access to banks is the conduit.”
Minority business owners are running their businesses and don’t have the capacity to go through the process, McIver said.
“It wasn’t transparent in the beginning,” McIver said “It was just a mismanagement and a failed roll-out of that.”
The PPP loan application didn’t have a place to indicate the race or ethnicity of the business owner, but it should have, said Jim Whitt, Columbia director of supplier diversity program development.
“They just processed the applications with no way to really account for who they were going to,” Whitt said. He said the applications didn’t indicate businesses with the greater need.
A lack of access to capital and traditional banking relationships for minorities is a prime issue, he said
“Most minority-owned businesses don’t have the relationships with banks that majority-owned businesses have,” Whitt said. “That’s a big failing of this program.”
The amount of financial information needed for the application was burdensome for minority business owners, Whitt said.
The situation reflects the structural racism in society, going back to the redlining practices after World War II that kept African-Americans from access to home loans, he said.
“This is all a part of who we are as a nation,” Whitt said. “The pandemic has kind of stripped away and laid bare all the faults. I think in order to help minority businesses, we’ve got to bridge the gap in sort of way. We’ve still got that big inequity. It impacts their ability to even start a business. There’s no capital base to start businesses.”
Those awarded loans could only indicate their race or ethnicity when applying for loan forgiveness and then it was voluntary, said Mark Christian, small business and technology development center specialist for University of Missouri Extension.
“For me, I want to know, are we serving our community?” Christian said.
The banking relationship could be an explanation for the discrepancy, said Peter Mueser, chancellor’s professor in the MU Department of Economics.
“A small business is less likely to have a close relationship with a bank,” Mueser said. “Who are they going to pay attention to? A little guy or a big guy applying for a loan of hundreds of thousands or millions of dollars?”
A big firm also can afford to assign an employee to do the paper work involved in filing the application, while the owners of a smaller business would have a harder time doing so.
The disadvantages are real, so the government should take action to compensate for them, Mueser said.
“I believe the government should take action to help small businesses,” Mueser said. “If a business has limited resources, the government should do something to compensate for that. The little guy has a variety of disadvantages.”
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