Did PPP loans reach more minority businesses in 2021? Leaders are divided.

Elizabeth and Antonio Wellington credit a $20,833 Paycheck Protection Program loan with helping to keep their Elmont trucking company going during the pandemic.

Wellie The Transporter LLC secured the PPP loan last year from Customers Bank in West Reading, Pennsylvania. The loan was forgiven in December because a majority of the funds went to pay employee salaries. 

The minority-owned business, with a staff of three, received help from the federal government’s flagship COVID-19 relief program amid a 2021 push by Congress and the White House to get more loans into the hands of the smallest businesses, those owned by women, veterans or members of minority groups and those located in poor neighborhoods. The politicians were responding to criticism of banks and other private lenders for concentrating on loans to big corporations and publicly-traded companies in 2020, the PPP’s first year.

Local groups that represent minority entrepreneurs are divided over whether the push was effective in helping businesses in their communities to survive the pandemic.

Minority business owners got funding this time around and it helped them stay afloat.

-Elizabeth Wellington, vice president of Wellie The Transporter and an officer in the Long Island African American chamber

"There was a big difference in 2021 compared with 2020,” said Elizabeth Wellington, vice president of Wellie The Transporter and an officer in the Long Island African American Chamber of Commerce. “Minority business owners got funding this time around and it helped them stay afloat, it made a difference for the community.”

She said the 300-member chamber assisted 220 businesses in applying for PPP loans last year by organizing educational webinars and building a relationship with Customers Bank. She said “many more” Black-owned firms in Nassau and Suffolk counties secured loans in 2021 than in 2020.

Not so among Hispanic-owned companies, according to Luis Vazquez, president of the 300-member Long Island Hispanic Chamber of Commerce.

'A few of my members got [the loans] but a lot of them were afraid.'

-Luis Vazquez, president of the Long Island Hispanic Chamber of Commerce (Photo credit: Newsday/J. Conrad Williams Jr.)

“I didn’t see a big difference…A few of my members got [the loans] but a lot of them were afraid because they didn’t have all the documentation and the process [of applying] was pretty difficult,” he said.

Data on the number of PPP loans made to minorities, women and veterans is not available because lenders weren't required to collect demographic information on borrowers. 

But the data does show that many more loans were made in 2021 than in 2020 to businesses and nonprofits located in Long Island's majority-minority communities. 

For example, 460 PPP loans were made in Central Islip in 2021 compared with 292 in 2020; 1,312 loans in Elmont compared with 512; 479 loans in Roosevelt compared with 124, and 257 loans in Wyandanch compared with 98. 

In 9 out of 10 communities where at least 80% of the population are members of minority groups, many more loans came last year than in 2020. 

In addition, more PPP loans were under $150,000 compared with 2020, a sign that smaller businesses were getting more help, according to a Newsday analysis of SBA data obtained under the Freedom of Information Act.

Asked about the PPP’s impact on minority- and women-owned businesses in the two-year period, SBA administrator Isabella Casillas Guzman told Newsday, “96% of the PPP in 2021 has gone to the smallest businesses with 20 or fewer employees – that’s where we have an over-indexing [high representation] of women- and people of color-owned businesses.”

Disparate treatment of white and minority borrowers by bank employees was an issue in 2020.

An investigation of 17 Washington, D.C.-area lenders, conducted April 27-May 29, 2020, found white applicants for PPP loans were treated better than Black applicants 43% of the time, according to the National Community Reinvestment Coalition.

Using Black and white matched-pair testers with equivalent qualifications, the advocacy group found white customers were told more frequently that they would qualify for a loan and not one Black woman was told she would qualify.

'I feel as if we did better in the 2021 round because we knew what to do.'

-Zeshan Hamid, owner of Shaheen Caterers & Event Planners and chairman of the New York South Asian Chamber of Commerce (Photo credit: Jeff Bachner)

On Long Island, South Asian business owners felt more comfortable applying for PPP loans last year than in 2020 because they knew more about the program and attorneys, accountants and other experts volunteered to help with the paperwork, said Zeshan Hamid, chairman of the New York South Asian Chamber of Commerce. 

“I feel as if we did better in the 2021 round because we knew what to do,” said Hamid, who founded the 200-member chamber four years ago on the Island and recently took it statewide. “In the 2020 round by the time that businesses found out about this opportunity it was gone” as the federal loan guarantees were used up, he said.

Hamid said his catering business, Shaheen Caterers & Event Planners, didn't qualify for a PPP loan because it doesn't have full-time employees. But Shaheen Restaurant, where Hamid is a partner, secured two PPP loans that preserved five full-time positions. Both businesses are in Hicksville.

Hamid said, “You would have lost a lot more jobs without these loans.” 

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.