GREENVILLE, S.C (WSPA) – As the state of South Carolina begins to slowly reopen restaurants and essential retailers, some small businesses in the Upstate are feeling a lasting financial impact from the weeks of being closed due to the pandemic.
After several protests and petitions from financially struggling hairstylists and other non-essential small business owners, Gov. Henry McMaster announced a plan to slowly begin reopening the state.
Jerry Wilson, Owner of It Don’t Matter, a southern cuisine and wings restaurant in the heart of a known food desert in Greenville’s District 25, said his reason for starting a business is to help the community and to leave behind a legacy for his family for years to come.
“We wanted to do something in the community that would get people into starting businesses, our own businesses, instead of allowing people to come in and start them we can start them directly from the community,” Wilson said.
Wilson told us that his restaurant has seen a 35 percent financial decrease and two weeks ago he applied for help through the Paycheck Protection Program, but he has yet to hear back from them with a decision.
There are four types of funding that owners can apply for to receive financial help during the pandemic. But unfortunately, these avenues inherently sideline minority owned businesses due to the fact that many of these options are loans through large banks, which increases the likelihood of them getting denied.
In a 2017 study conducted by the SBA Office of Advocacy, out of the African Americans who chose not to apply for financing despite needing it, almost 60 percent said they didn’t apply because they didn’t think they would be approved by the lenders.
But it’s a valid fear backed by decades of denial. Black business owners have a drastically higher chance of getting turned down for loan assistance than any other racial group and double the denial rate of non-hispanic whites.
According to data collected by the Federal Reserve, black-owned companies are more likely to have applied for bank financing and less than 47 percent of these applications were fully funded which leaves a whopping 53 percent denial rate.
The decades of black business owners getting denied for loans has now trickled into the Pay Check Protection Program (PPP) which was designed to provide financial relief to small businesses and help them survive the pandemic.
According to the Center for Responsible Lending, roughly 95 percent of black business owners without employees have almost no chance of receiving any funding from mainstream banks through the PPP. Which means businesses with employees have a higher chance of receiving funding.
Butch Kirven, Greenville County Council Chairman said they recognize this disparity and plan to devote a portion of the $91 million grant they received from the U.S. Treasury toward helping minority owned businesses.
“We want to benefit the smaller businesses that mostly didn’t get any support from the federal program,” Kirven said. “Council is aware of that and I’m pretty sure council is going to designate a portion for minority owned businesses that are in the community.”
Jerry Wilson said even though he has yet to be approved or denied, he’ll continue to run his business on faith.
“We built this business solely on God, and we want to built it around God. Any business that takes that stance then they’ll have much success,” Wilson said.
For more information on the Paycheck Protection Program, please visit the SBA website.