Updated: Sep 24, 2020
An executive at one of the nation's largest Black-owned banks shared some insights on
why some small businesses struggled to gain access to Paycheck Protection Program loans.
Teri Williams, president and COO of Boston-based OneUnited Bank, said her institution
received a large number of PPP applications from South Florida businesses. OneUnited has a
branch in Miami, its only location in Florida. "We had more applications from Florida than
Massachusetts," Williams said. "I think it's because Miami is home to so many startups and
smaller businesses. In Massachusetts, a lot of people work for bigger corporations."
The $656 million asset bank began accepting PPP applications during the program's second
round. The average loan was $50,000, Williams said. Although the application deadline for the federal program was extended to Aug. 8, the bank stopped accepting applications
Williams said many of the businesses that qualified for the program had already
applied by the end of June. OneUnited continued to receive applications through
June 30, but the quality of the applications degraded with time. "We started to see a lot of businesses that didn't qualify, or didn't have the documents required to apply for a loan," she said.
The documentation issue was a major barrier for small businesses, particularly
micro-businesses with fewer than 10 employees, Williams said. Many applications
the bank received were missing tax returns, payroll information and other key
documents needed for approval. In some cases, the smallest businesses were
never able to gather the required paperwork, even after consulting with the bank.
Williams suspects many small businesses, including Black-owned enterprises, were
never approved for a PPP loan because they didn't have the documents to support
an application. That could contribute to reports that say minority-owned
businesses are less likely to receive a loan, she added.
"A lot of these really small businesses are great at the front end, they know how to
make money and serve customers, but they're not as strong with back-office
operations like accounting and keeping track of paperwork," she said.
That challenge existed prior to Covid-19. But the PPP application process amplified
the issue, Williams added.
Surveys and anecdotal reports indicate minority-owned businesses received fewer
PPP loans than their white-owned counterparts.
In one mid-May survey from Global Strategy Group, only 12% of Black and Hispanic
businesses received a loan even though 51% had applied. Meanwhile, 41% said they
had been rejected for a loan.
The SBA recently said it is legally unable to require applicants to submit
demographic data as part of the $659 billion forgivable loan program, making it
difficult to determine whether Black, Hispanic, Asian, Native American and women-owned
companies are being shut out from loans.
Lia Yaffar, interim director of the Community Fund of North Miami Dade, agreed
with Williams assessment that collecting documents was a big challenge for small
"It showed us there's a need [to provide] a higher level of structured assistance to
those business owners," she said.
The Community Fund of North Miami-Dade is a community development financial
institution, which offers financial services in low income or underserved markets.
The fund is affiliated with the Opa-locka Community Development Corporation.
Miami has more minority-owned businesses than any U.S. metro aside from San
Jose, California, according to the FIU Metropolitan Center. Thirty-seven percent of
Miami businesses are minority-owned, compared to 18% in the U.S., the center
Like many small banks, Williams said OneUnited won new clients through the PPP
process. But she added the Black Lives Matter movement brought more new
customers to the bank. Branches have been "packed" with people lining up to open
accounts in recent months.
"I think customers are reacting to the national conversation about racism and
seeking us out," said Williams, adding that the growth in new accounts is not tied
to any specific marketing strategy. "I think a lot of people want the comfort of
banking with a Black-owned institution right now.