Bringing Hope to Small Businesses – One Paycheck Protection Program (PPP) loan at a time
Prior to the pandemic, running a successful small business was no easy feat. According to the U.S. Bureau of Labor Statistics in August of 2020, it was estimated that 20% of small businesses would fail within the first year, at the end of their fifth year close to 50% would fail, and in 10 years only one third of small businesses would still exist translating into an even higher failure rate of 70%.
Unfortunately, the COVID-19 pandemic contributed to the already existing struggles and brought so many more new challenges for small businesses to face for survival. Since the onset of COVID-19 in the United States, more and more of the temporary business closures during that period are now permanent. One of the main reasons most small businesses perish during their early years is due to a lack of cash flow which became even more devastating during these turbulent times. Additionally, minority owned businesses were already vulnerable and located in areas and industries that were hardest hit by the shutdown.
At Raza Development Fund (RDF) we understand the importance of our small business community, the challenges many of them have accessing capital, and their importance to the communities they serve. We worked closely with local community organizations and UnidosUS Affiliates in cities such as Phoenix, Portland, Seattle, Philadelphia, and San Antonio who had an intimate knowledge of small and micro businesses in their communities. This provided us with a wonderful opportunity to bring the Paycheck Protection Program (PPP), a loan offered by the Small Business Administration (SBA), to the smallest of businesses and alleviate the cash flow crisis that most small businesses were experiencing. The PPP loan has undoubtedly been a lifeline to many in our small business community. As of today, RDF has received SBA approval for $4.1 million on 193 PPP loan applications.
In San Antonio, RDF partnered with organizations and contacts in the community who had strong and trusted relationships with their small business clients and together they have submitted applications totaling more than $250,000 to 16 businesses with an average PPP loan size of $16,000. These contacts included, local CPA, Ileana Vilchis and the following organizations:
The Maestro Entrepreneur Center a non-profit organization designed to help entrepreneurs grow their small businesses. It serves as an incubator accelerating and connecting small businesses to tailored industries and is creating jobs for the local Greater San Antonio community.
Westside Development Corporation (WDC) a non-profit organization which serves a 15 square mile area in the Westside of San Antonio. This zone encompasses some of San Antonio’s most impoverished neighborhoods and economically distressed census tracts. WDC has created small business programs and has instituted revitalization efforts that work toward their mission of economic stability for the Westside.
As a result, sole proprietors with only a single employee such as Mr. P’s Neighborhood Eatery (serving as a Westside eatery since 2018) and Gersal Jewelers (established in 2003) were able to connect with us through our partners in San Antonio and we were able to walk them through the application process and the needed documents in order to apply for their PPP loans. This was the first PPP loan for both and it served as a lifeline during these very tough economic times.
These are two of the almost 200 small businesses that have been beneficiaries of the PPP program offered through RDF. They mattered just as much as the others we worked with and they were able to continue to serve their community.
At RDF, we are committed to helping small businesses one PPP loan at a time, guiding them through each step of the process. We continue to urge our small business community to take advantage of the funds available through the PPP loan which could be forgivable if they meet the eligibility requirements. The PPP program, originally scheduled to end on March 31, has now been extended through May 31, 2021 or until the funds allotted by Congress for PPP have been committed.
For more information contact your RDF investment professional or Star Reyes-Gonzalez from our Small Business Initiatives team at firstname.lastname@example.org to express your interest in this program.