By Dianne Anderson

Before and during the pandemic, Black businesses barely hung on, and missed out on some major loan opportunities that helped other businesses keep their doors open in the first rounds of stimulus CARES Act funding.

Today with new inflationary pressures in play, billions of dollars in American Rescue Plan Act funds now flowing down in emergency grants and lending over the next two years could be a big help.

As long as it reaches those that need it most.

Pepi Jackson said the past two years have seen a very dramatic downturn in the Inland Empire for Black businesses.

“Especially in small cities like Perris, Hemet, for that matter, Moreno Valley, San Bernardino and Rialto. In these places, some of them have not come back. They’ve closed their doors, they’re just doing other things now,” said Jackson, CEO/president of the Riverside County Black Chamber of Commerce.

From where he stands with decades of experience as a businessman, he is familiar with the local business landscape. He worries that, at best, most are struggling to keep the lights on.

“African American small businesses in the Inland Empire are not doing swimmingly well,” he said.

That perspective runs contrary to a first of its kind “Minority Report” from the Inland Empire Center for Entrepreneurship (IECE) at California State University, San Bernardino. It shows Black and Hispanic entrepreneurship grew to more than 50% in Riverside and San Bernardino counties, outpacing the state at 19%.

Despite the pandemic, the report shows that minority businesses did well between 2017 and 2021.

Mike Stull, director of the Inland Empire Center for Entrepreneurship, said that they have been working with the state and Small Business Development Center to help get more support for small businesses with microgrants, and on track to access funding.

He said they are also working with local cities, including the city of San Bernardino to help get funding support into the hands of small business owners. In the recent report, minority businesses expressed the importance of accessing government contracts.

For that reason, Stull said IECE Procurement Center introduces companies to government contracting process, certification, building networks accessing contracting opportunities.

“Right now, we’ve had ongoing conversations with a lot of local cities. They say they want more minority-owned firms engaged in the contracting processes, but we’re finding that their systems aren’t built for that,” he said.

IECE is also challenging cities to change how they get resources to small businesses to engage in the contracting process. Their Procurement center helps companies get certified, get on bid lists, and work with a dedicated consultant in their SBDC program.

“We created this procurement center to do that, and we’re doing training around that to where we are introducing them how to do business with different agencies,” he said.

In their larger general state of entrepreneurship 2021 report, surveyed business owners cited their challenges.

Reflected in the survey, he said a lot of businesses, particularly minority businesses were at a disadvantage because they were generally not ready to respond to access resources that were coming down, PPP or IDLE or all those programs that rolled out initially.

“That was unfortunate because it was a race to get their first. Whoever was in line and ready, they were going to get resources. You had to be in position to access those funds,” he said.

Of the businesses surveyed, the top challenges were the pandemic and hiring employees. Minority-owned firms reported access to capital and cash flow, and finding reliable employees was the primary concern.

So far, he said 903 participants completed their IECE Startup and Early Growth Programs, including 252 Black/African American, and 253 Hispanic. Of the 124 participants that finished the Financial Fitness Bootcamp, there were 27 Blacks and 31 Hispanic.

He said the indicators show that Black and Brown businesses are driving the growth in new businesses.

“That to me is a huge positive,” Stull said. “We’re seeing an increased rate of business start-up activity among the Hispanic and Black population.”

More support is coming for minority entrepreneurs, including small business Financial Fitness Bootcamp. Other services include Catapult Business Growth Network & Peer Mentoring, and training with the Procurement Center.

Also in development are multiple Entrepreneurial Resource Centers (ERC), Microloan, and, or seed grant programs, and a Food Entrepreneurship HUB.

In time, he hopes to bring BizCon popups, similar to efforts in Long Beach, which helps small businesses fill out applications to access microgrant funding as it comes down, along with other support services wherever they set up the tents.

From their impact report for the center for entrepreneurship in 2021, Stull said they assisted 4,700 businesses with one on one biz counseling.

“We trained over 17,000, but in our business counseling, more than half of the businesses we assisted were minority business. A little under half were women-owned,” he said. “Many of the programs we delivered are targeted to female or Spanish-speaking business growth programs.

In another study, the National Community Reinvestment Coalition looked at discrimination in lending before COVID-19 and through the implementation of PPP lending. They found statistically significant disparities in how bank representatives discriminated in the small business loan process.

All testers were strong on paper to qualify for a loan, the report said, but female and Black male tester profiles were intentionally designed to be slightly better than their White male counterparts in terms of income, assets and credit scores.

Even so, white testers received better treatment, and we’re encouraged to apply for loans with the financial institution. The report said lenders discouraged the Black testers from applying for a loan, while encouraging white testers to apply for one or more loan products.

“This “double impact” on minority applicants, discouragement and failure to provide complete information, not only limits minority access to credit, but it also damages the credibility of the small business lending community,” the report said.

To see the IECE State of Entrepreneurship Minority Report  https://bit.ly/3QVPfMy

To see the NCRC Lending Discrimination PPP report,  https://bit.ly/3Bncsli