Detroit was doubly disadvantaged in efforts to get PPP support, and this watchdog group is demanding Congress do better.
DETROIT, MI — From restaurants and bars to bookstores and farms, Michigan small businesses have struggled to adapt and survive during the coronavirus pandemic.
Many businesses haven’t managed to survive. Satchel’s BBQ in Ann Arbor, for instance, will never reopen its doors. Satchel’s said in an email to customers that the virus was making many businesses like theirs face a “fight or flight” decision, and they lacked the resources to fight.
The main source of resources businesses were given from the government came in the form of forgivable loans from the Small Business Administration’s Paycheck Protection Program (PPP). But as The ‘Gander has previously reported, that program left behind a lot of Michiganders, and in particular Black-owned Michigan businesses.
Two studies from the anti-corruption watchdog group Accountable.US identified Detroit as one of areas where Black-owned businesses were the most shortchanged. One of those studies focused on the high percentage of Black Michiganders left behind by the PPP, the other showed how the PPP left behind poorer areas.
“As the health crisis and recession grow worse, Congress has no excuse for not immediately passing another relief package,” said Accountable.US President Kyle Herrig in a statement. “But lawmakers must also learn from their mistakes and ensure that promised resources actually make their way to underserved communities and small businesses across the country, not just to the wealthy and well-connected.”
These studies draw further attention to Renaissance Global Logistics (RGL), a company owned by Republican Senate candidate and ally to President Donald Trump, John James. RGL received over $1 million from the PPP, and touted being one of the few Black-owned businesses to do so, while others without the same political ties failed to receive PPP money.
“As an essential business shipping automotive parts, RGL used the funds to keep employees on their health care plans through the crisis and support their customers who took significant losses,” said Abby Walls on behalf of John James, the Detroit News reported in July. “RGL was among the 5% of minority-owned businesses to gain access to PPP funds and use their business resources to aid their Detroit community by helping to deliver hundreds of thousands of units of meals, PPE (personal protective equipment), and cleaning supplies during the crisis.”
While RGL, a business built on collecting money from the government, prospered under PPP, the Accountable US studies show the sheer breadth of small businesses that didn’t.
Accountable found that congressional districts with the highest percentage of Black residents got up to $13 billion less in PPP funding than those with the lowest percentage of Black residents, and districts like those anchored in Detroit received 40% fewer total PPP loans than the districts with the lowest percentage of Black residents.
Moreover, the ten congressional districts struggling most with poverty like those anchored in Detroit received tens of thousands fewer loans, totalling $13 billion, than those wealthiest districts.
Accountable’s findings echo other recent studies and anecdotal evidence showing that Black business owners were largely left behind by the PPP. The organization’s research adds to this body of work by showing how richer, whiter districts fared better than Black and lower-income communities.
“Small businesses are the engine of the United States, and in order to safely resume full operations they are in dire need of access to personal protective equipment,” Rep. Brenda Lawrence (D-Southfield) told Michigan Advance. “Our Black businesses have been disproportionately impacted by the lack of access to these critical loans. It is imperative that we do what we can to make sure the small Black businesses are also able to recover from this pandemic.”