A company owned by Senate candidate John James got over $1 million in Paycheck Protection Act loans while the vast majority of Black-owned small businesses got nothing.
MICHIGAN — Businesses, particularly those owned by Black Michiganders, have struggled with an inability to get funding from the Paycheck Protection Program (PPP). Restaurants in particular, like IVY and Table No. 2 in Detorit, have felt the pinch.
Nationally, an estimated 40% of Black-owned businesses are not expected to make it through the pandemic.
“I’m resentful [with the application] process because I know when [large] companies get bailouts, they just get the money,” Dennis Williams, owner of Royal Oak restaurant Le Crepe, told The ’Gander.
While Michigan’s everyday entrepreneurs are struggling, the Small Business Association’s emergency coronavirus funding has been awarded to businesses tied to influential Republicans.
For instance, Jackson-based parts assembler Orbitform also received over $1 million. Orbitform was founded by Michigan’s Senate Majority Leader Mike Shirkey (R-Clarklake), though a spokesperson told the Detroit Free Press that Shirkey is not involved with the day-to-day management of the company.
The vast majority of Michigan businesses, however, got no funding from PPP. Fewer than 3% of Michigan businesses saw any funding from the program, and of those that did, the vast majority received less than $150,000.
Republican-Owned Businesses Score Big PPP Loans
Michigan Senate candidate John James’ business, Renaissance Global Logistics, received over $1 million in small business funds. Renaissance specializes in exporting parts for Ford cars, including transmissions and sheet metal.
James famously said he supported President Donald Trump “2,000%” in his 2018 Senate bid. James is currently running his second Senate campaign against incumbent Sen. Gary Peters.
And as The ’Gander has reported, businesses tied to people in Trump’s orbit have found themselves with PPP funding. And the businesses with preexisting relationships with banks had an easier time filing for PPP money. Broadly, as the Washington Post explains, the Trump Administration has been criticized for mishandling the PPP funding process due to dysfunction throughout the application process.
Lobbying firms Kelley Cawthorne and Governmental Consultant Services also received large sums from the PPP.
Shirkey and James did not respond to The ’Gander’s request for comment, but in an interview with the Detroit News a spokesperson for James highlighted Renaissance as one of only 5% of minority-owned businesses that got PPP funding.
“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. “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.”
Michigan’s Black-Owned Businesses Left Behind
Over 100,000 Michigan businesses received money, but too little to be included in the SBA’s disclosures. The average loan was $107,000. In total, 121,000 businesses in Michigan received PPP funding.
Black-owned businesses nationwide received a small fraction of PPP money. On top of that, less than 3% of Michigan businesses received funding. In large part, this left Michigan’s Black business owners in the lurch.
And while John James’ company benefited from PPP, many Black-owned businesses in Michigan didn’t.
“The process is stupid,” Caleb Foster told The ’Gander. “If [Shake Shack] got the money, everyone else should’ve gotten the money as well. The conglomerates were getting it, the bigger businesses were getting it, and the little guy was getting left out because the little guys don’t have the relationship with the banks that the bigger guys have.”
Foster and his wife, Sharoune, own several businesses, including Foster’s Childcare Center in Southfield and the Cold Stone Creamery franchise in Sterling Heights. Foster told The ’Gander that Huntington Bank, who he has a relationship with, told him PPP’s second round funds were exhausted. QuickBooks, however, approved his loan application the same day he submitted. The loan was funded the following day.
Chef Omar Mitchell of Detroit’s Table No. 2 turned to GoFundMe when his attempt to get PPP funding was unsuccessful. Another Black-owned Detroit restaurant, IVY, was similarly left out of PPP. This despite SBA data that shows restaurants, in general, were one of the largest sectors supported by PPP funds.
“We didn’t receive anything,” Nya Marshall, owner of IVY, told The ’Gander. “We have some really great customers who are sticking with us through curbside service.”
Congress is attempting to solve that problem, though. A new proposed bill would make $50 billion in grants available to state and local governments for the smallest businesses and nonprofits.
“Minority-owned businesses are key drivers of growth in towns and communities across the country, but often face steep challenges when it comes to things like access to capital, mentorship, and training,” Sen. Cory Booker (D-New Jersey), bill co-sponsor, said in a statement. “These existing disparities have only been compounded by the disproportionate impact of COVID-19 on minority communities and the ensuing economic downturn. Our bill addresses these challenges head-on by strengthening and expanding the Minority Business Development Agency so it can provide greater relief to minority-businesses as they weather this economic storm.”
Information may never be made public about 80% of PPP borrowers, who received less than $150,000. Those loans can be completely forgiven if used primarily for approved expenses like employee wages.
This story originally published on The Gander.