Biden Administration Opens PPP Guidelines: What Does This Mean for Detroiters?

As the world approaches the one-year mark with the coronavirus, businesses and business owners are still seeking financial relief from its effects. Many going out of business, small community mom and pop shops are amongst the pandemic’s worst hit. Promising to act swiftly during his campaign, newly appointed President Joe Biden and his administration are using their first 100 days to provide coronavirus relief to even the smallest businesses.

According to a report released by the U. S. Small Business Administration’s Office of Advocacy, small businesses make up about 44 percent of its gross domestic product. The country’s small businesses also help make up about two-thirds of the new jobs and hire close to half Americans. For Black-owned businesses, access to capital, knowledge and fiscal education, and general mistrust all inhibit how the business functions and its success rates.

Originally launched in 2020, The Paycheck Protection Program, or PPP, is an initiative enacted during the pandemic’s height to provide relief to businesses financially devastated by the coronavirus and allow them to keep their workers employed. The program is a loan but comes with an opportunity for 100 percent loan forgiveness and will help provide critical help to those who need it most.

“The Paycheck Protection Program is really a lifeline to small businesses in the form of an extremely reasonable and accessible loan directly with the SBA, private and non-profit lenders, that small businesses can get a PPP loan and it’s forgivable,” says Pierre Batton, Vice President of Small Business Services at the Detroit Economic Growth Corporation.

“It’s an incredible financial product that has never been available in America for small business owners and for, that this is why we want to make sure Black and Latino businesses in Detroit are taking full advantage of this.”

The second round of PPP assistance has been expanded to include sole proprietors, independent contractors, and all self-employed individuals. Under the Paycheck Protection Program, President Biden widened the net and established a 14-day period where businesses with 20 employees or less and sole proprietors could apply for assistance.

Detroit Means Business, a local organization dedicated to growing the city’s small businesses, helps spearhead the PPP program for residents. As a part of the eligibility guidelines, applicants looking for a lender will have assistance setting up a new business investment or deposit account with participating partnering banks; Bank of America, Chase Bank, Fifth Third Bank, or Huntington Bank. Applicants who already have a financial lender can submit their applications with that institution.

Applicants who need assistance with the application will work closely with a Community Development Financial Institution, or CDFI, to submit their Paycheck Protection Program application. CRF Detroit, the Opportunity Resource Fund or First Independence Bank will be on hand to assist in answering questions and submit applications on behalf of small business owners. Encouraging more Black and brown-owned small businesses to apply, the Opportunity Resource Fund helps business owners receive vital funds needed for business operations.

“We didn’t really have a lot of applications from Detroit last year and so this time, we wanted to turn that around,” says Christi Narayanan, President, and CEO of Opportunity Resource Fund. “We were really excited to be asked to join the Detroit Means Business table. We continue to meet with them on the regular basis with the focus of how do we drive more small minority businesses to the table.”

For Detroit-area small business owners, lack of access to viable information was a major roadblock in applying for the first round of PPP assistance. With the success of the first program, the second round of support is making its way to more business owners.

“I think that when the program first started, I don’t think a lot of people knew they could (apply). The info wasn’t available to everyone. Now, with the second round, the info is more available,” says Crystal Mitchell, owner of Sitting Pretty Spa in Southfield.

Although it is a loan, the Paycheck Protection Program’s payments can qualify for forgiveness. During the first eight to 24-week period after receiving funds, fees will be waived for both First and Second Draw PPP loans if business owners can show the funds went towards payroll costs, maintain employee and pay levels and prove at least 60 percent of funds awarded went towards payroll costs. Awardees can apply for forgiveness at any time but will only have up until 10 months after the last day of the term period. Afterward, loan payments will begin. Wanting to ensure all business owners could get the help needed, community developers are revamping their practices to ensure aid reaches all.

“We’re looking long term as a CDFI to make certain that how do we stay the focus on this issue? How do we take the best of PPP and carry that forward into our lending processes make sure certain no one is left behind the next time around?” says DeAmo Murphy, Director of External Affairs for Opportunity Resource Fund.

Historically, there has been a mistrust established between the city and its Black and brown communities. With memories such as Black Bottom and Paradise Valley, urban businesses being erased for development, Black business owners face several racial and system barriers in advancement. However, organizers are working to cure and earn the trust of its residents.

“PPP, I think as with any program, there’s a history there with Black and brown businesses and fair and equitable access to programs and to products, that still carries over into modern America. Things aren’t perfect. Systemic racism is real and still presents a lot of challenges for Black and brown businesses,” says Batton.

All small businesses are encouraged to apply, but Black, brown, and female-owned and operated businesses are strongly encouraged to go online to Detroitmeansbusiness.org and read the information provided to apply. Borrows will be able to get free technical assistance through Detroit Means Business.

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