Protecting Who?: Paycheck Protection Program does little for Green Bay’s Black business owners
Protecting Who?: Paycheck Protection Program does little for Green Bay’s Black business owners
The federal relief program also lacks complete data on the demographics of those who received loans.
Protecting Who? is a four-part series The NEWcomer is producing to delve into how the federal Paycheck Protection Program has affected underrepresented communities in the Greater Green Bay area. This is the first story in the series.
Catch up with our other stories about how the bulk Green Bay PPP loans were concentrated in suburbs, how a lack of PPP funding in Green Bay’s Latino community is nothing new, and the logistical hurdles and application fatigue a small, minority-owned business has experienced in the past year.
This story was completed with information from Reveal’s Reporting Networks and Big Local News. Thank you for reading.
Seaphes Miller said he was “disappointed, but not surprised,” to learn his company was the only Black-owned business in the Greater Green Bay area to fill out “race and ethnicity” data in his application for a loan from the federal Paycheck Protection Program (PPP).
“I’d like to reasonably think I’m not the only African-American-owned business (in the area) and not the only one who needed help in this time period,” said Miller, CEO and founder of Fusion Integrated Solutions, LLC.
Fusion is a consulting firm that specializes in the paper and pulp, energy and utilities, marine, and food and beverages industries. Fusion operates a branch in Howard, just outside of Green Bay. Miller, a former Procter & Gamble executive, founded the company in 2004.
The majority of businesses that applied for and received a PPP loan did not fill out the “race/ethnicity” information in their applications. The federal Small Business Administration, which administered the program as part of the government's COVID-19 relief efforts, didn't require businesses to provide that information about their owners. According to SBA data, Wisconsin businesses received 85,459 loans, and only 14,310 (roughly 17 percent) of them included information on race demographics in their applications.
Small businesses were the main target of PPP loans. The SBA roughly defines a small business as having 500 or fewer employees, but that can vary based on the industry.
Of the 2,652 businesses in the Greater Green Bay area that received a PPP loan, 2,282 did not provide information on the race of the applicant.
According to PPP data, 370 Green Bay area businesses provided “race/ethnicity” data. Of those 335 reported having white owners, seven were American-Indian-owned, 16 were Asian-owned, 11 were Hispanic-owned, and one was Black-owned.
To address the gaps in federal data, reporters at The Center for Investigative Reporting's Reveal analyzed 5.2 million loans from the first two rounds of the Paycheck Protection Program. By calculating the proportion of businesses in every census tract that received PPP loans in 2020, they found that businesses in majority-white census tracts received loans at 1.5 to 2 times the rate of businesses in majority-Black and -Lantix census tracts in the top 52 metro areas across the country.
Robust infusion meets grim reality
While the demographics of a neighborhood don’t necessarily reflect the same of its business owners, a look at Green Bay’s census tracts and their PPP recipients can show how areas in eligible businesses in the region fared and the impact these loan programs have on their surrounding communities.
Eligible businesses were determined by two sources: a count of business addresses from the U.S. Department of Housing and Urban Development and the U.S. Postal Service and a count of self-employed workers from the Census Bureau’s American Community Survey.
The census tract Fusion is in is 95 percent white, roughly 20 percent higher than Brown County’s average. This tract is found on the western stretch of Shawano Avenue heading to Howard and has a population of nearly 6,000 people. Businesses in this tract received 74 PPP loans, totaling nearly $4.6 million.
An estimated 100 percent of the businesses in Fusion’s majority-white census tract received PPP loans.
Despite the high number of white residents in Fusion’s census tract, it is not the whitest population tract analyzed. The census tract that stretches from the village of Wrightstown to Hobart has the highest concentration of white residents in the region. This tract received 318 PPP loans for its population estimate of just over 19,000. Loans received totaled over $63 million, an average of just over $200,000 per loan.
In stark contrast to this robust infusion of capital, the census tract with the highest concentration of Black residents in Green Bay is made up entirely of the Green Bay Correctional Institution. This grim reality is a reminder of how predominantly rural, white communities —especially in Wisconsin—are using incarcerated individuals to boost population counts and influence the drawing of voting districts.
The census tract that surrounds the GBCI did fairly well as 61 percent of businesses in this majority white census tract received PPP loans.
Moving down the list, the census tract with the second-highest concentration of Black residents in Green Bay, flanked by North Military Street on the right and North Taylor street to left on the city’s west side, received only 32 loans for its 2,774 population estimate but averaged roughly the same $200,000 per loan.
The tract with the highest concentration of white residents received PPP loans at almost 10 times the rate of the tract with the highest concentration of Black residents (excluding the GBCI census tract), but the former tract has a population estimate of roughly seven times the latter.
Reveal’s data also shows that the tract with the highest concentration of white residents has a combined estimate of 585 eligible businesses. Given the 318 approved PPP loans, the loan to business rate (the number of loans divided by the number of eligible businesses) for this tract is 54 percent.
The tract with the highest concentration of Black residents (excluding the GBCI census tract) has a combined estimate of 100 eligible businesses. Given the 32 approved PPP loans, the loan to business rate for this tract is 32 percent.
The average loan-per-business rate for Green Bay was 40 percent.
Data scaled down to a micro-level for a predominantly white region isn’t going to reveal truths unknown to the population, but it can provide a launching point for exploring a few key questions. Why are there so few eligible businesses in the more urban area? Why don't applicants want to list their demographic information? What impact will the billions of dollars injected into the Green Bay business area through PPP loans have on an already fractured business community?
"Not unique to Green Bay"
Miller said the process of applying for a PPP loan was a fast-paced, late-night task guided by his connections from his bank, Village of Howard representatives, and eventually contacts at the state and federal level.
Miller’s advice to businesses who haven’t had success in receiving PPP loans or other assistance is to start an open line of communication with your bank, accountants, and other professional services.
“It's never too late to have that first meeting with your bank, even virtually to develop that relationship,” said Miller.
Fusion received a $1.2 million PPP loan. Data provided by Reveal’s Reporting Networks shows the firm reported that the funding saved 62 jobs.
In January 2021, the SBA reopened for First Draw and Second Draw applicants. Businesses with no more than 300 employees and a demonstrable 25 percent loss between comparable quarters in 2019 and 2020 may be eligible for Second Draw applications. Applications are due May 31.
Fusion has already submitted its application for a Second Draw PPP loan. Without the first round of PPP funding, Miller said the outcome would have been drastically different.
“We would have had to reduce our workforce pretty significantly,” said Miller.
The majority of clients Fusion works with were deemed essential businesses, as they contract with businesses in the manufacturing and utility industries, and Fusion’s operations already allowed for employees to work from home. While Fusion had to scale back when clients were met with COVID-19 restraints, business seems to be back to normal for the consulting firm.
Miller, who lives in Milwaukee but has been linked to the Green Bay business community since 1985, said he saw businesses who don’t have an established relationship with their bank or other business connections consider the PPP loan a “fool’s errand,” because of the time and resources needed to devote to the application.
SBA data provided last year didn’t detail how much minority-owned businesses received and what small insight was provided showed that Black-owned businesses “received less than 2% of the loans, and 6.6% of the loans went to Hispanic-owned businesses,” according to a report by the Center for Public Integrity.
Aware of his professional leg up, Miller said the lack of awareness, outreach, and development of Black-owned businesses in the region has been exacerbated by the pandemic.
“I don’t think it’s unique to Green Bay,” said Miller. “I think as a country we’ve got our challenges.”
No safety net
Over a year ago, there were many avenues for businesses to apply for and receive a PPP loan. Businesses worked with their banks, consulting firms, business groups, and other resources to understand and navigate the quickly-developed assistance program.
The Greater Green Bay Chamber of Commerce’s mission is to “strengthen member businesses, enhance economic and workforce development, and improve the quality of life in our community and region.”
Last May, the GGBCC released a resource hotline for businesses in the area to answer about PPP loans, CARES Act questions, and other financial advice.
Armstrong said one reason that could lead to businesses not accepting assistance is a “bootstrap” mindset.
“If I had to describe people here, I would say it's very hardworking,” said Armstrong. “The work ethic here is top-notch.”
When asked how the GGBCC reached Black-owned businesses and/or minority-owned businesses to assist with PPP loans last year, Kelly Armstong, vice president of economic development, said the GGBCC reached over a hundred minority business owners through a direct mailing with information on their emergency grant program.
The GGBCC launched a grant program for small- to medium-sized businesses in the Greater Green Bay region. The Back to Business grant offered two rounds of funding over the course of 2020 and provided a total of $276,599 to 39 local businesses, according to the GGBCC. Demographic information for the grant recipients was not collected.
Armstrong said the true determining factor of whether or not a business would be equipped to receive a PPP loan was their relationship with their bank or other financial institutions.
“It really depends on what your banking relationship was,” said Armstrong.
Rajon Hall is a Black entrepreneur, realtor, and current UW-Madison graduate student. He is currently facilitating an ongoing UW Extension research project to collect business data for Black-owned businesses in Northeast Wisconsin.
Hall said he has heard from participants in the region that aversion to financial and business institutions contributes to a resource gap for Black-owned businesses.
“A Black person walks into a bank asking for a loan or wanting to ask for a loan,” said Hall, “and before they even or they feel like they're gonna get a no.”
Hall, a Green Bay resident, said many Black business owners did not clearly understand how PPP loans would affect them.
“There’s not a lot of information regarding that background being spilled out to the Black communities,” said Hall.
Hall has surveyed over 75 Black business owners in the past two years in Brown, Fond du Lac, Winnebago, and Outagamie Counties, with a recent expansion into the Milwaukee area.
Hall has consistently found that Black business owners experience a lack of outreach and don't always know about the assistance available to them.
“I think that there's not enough people focusing specifically on Black community entrepreneurship and business ownership,” said Hall.
Hall said that Black business owners don’t have the same safety net their white peers do in his experience. This creates a mentality in which business owners do their best to build and fund their businesses without outside help.
“I think a lot of people get a lot of their funds and stuff out of the mud,” said Hall.
This aversion has roots in the country’s long and painful history of lender discrimination.
Do you have a story or insight into applying for or receiving a PPP loan in Green Bay? Email The NEWcomer to share your story.
Lending discrimination occurs when a financial institution makes credit decisions based on factors other than an applicant's credit history, such as race, sexual orientation, arrest record, and other protected classes.
While laws such as the Fair Housing Act, the Equal Credit Opportunity Act, and the Community Reinvestment Act exist to protect lendees from lender discrimination, these decades-old bills are not enough to address centuries-long patterns of discrimination
Hall said he hasn’t taken out a loan for his business endeavors and feels the same way.
“When we hear the word loan,” Hall said, “it just doesn’t click the same way.”
Before a global pandemic devastated the economy, Black businesses were already struggling to get by. Black businesses accounted for 8 percent of all SBA loans in 2008. By 2016, this number fell drastically to 3 percent of all SBA loans, according to the National Community Reinvestment Coalition.
The lack of established capital and generational wealth in Black-owned businesses led almost 90 percent of Black respondents to NCRC’s Reimagine Main Street survey to say grants, not loans, would be more beneficial to the longevity of their businesses.
The Wisconsin Economic Development Corporation did provide a $2 million Ethnic Minority Emergency Grant last May, which allowed for a one-time grant of $2,000 per application for 1,000 applicants. The assistance was aimed at businesses in industries highly impacted by COVID-19, but only businesses with five or fewer full-time-equivalent employees could apply. Additionally, if an organization qualified for and received PPP funding, the acceptance of PPP funding would have eliminated them from the WEDC minority grant. Minority businesses had to roll the dice and choose between dismally low loan acceptance rates or a one-time infusion of $2,000.
The strings attached to taking out a loan are also part of the aversion for Hall, who said a lot of Black business owners won’t take out loans because they can’t rely on a safety net of generational wealth and resources like their peers.
“I could get this loan, but there’s so much more that comes with it and I’m just not in a place to be taking it out,” said Hall. “I think a lot of other business owners feel the same way.”
Hall’s ongoing research project is one way current or future Black business owners in Wisconsin are creating a network of resources to fuel and inform their aspirations. The continued growth in equity, wealth, and resource gaps is guiding him to be a mentor to new business owners.
“We're really just building a network of Black business owners so we can continue to work through each other,” said Hall.
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Protecting Who? is a four-part series The NEWcomer is producing to delve into how the federal Paycheck Protection Program has affected underrepresented communities in the Greater Green Bay area. This is the first story in the series.
Catch up with our other stories about how the bulk Green Bay PPP loans were concentrated in suburbs, how a lack of PPP funding in Green Bay’s Latino community is nothing new, and the logistical hurdles and application fatigue a small, minority-owned business has experienced in the past year.
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