Worcester Business Journal

August 17, 2020

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12 Worcester Business Journal | August 17, 2020 | wbjournal.com Not prioritized BY GRANT WELKER Worcester Business Journal News Editor Despite Congress calling for minority-owned businesses to receive priority in the $669B Paycheck Protection Program, that didn't happen locally or nationally C hizoma Nosike wouldn't have known it a year ago, but a federal business loan may be the reason her company, Acclaim Home Health Care in Worcester, is still in operation. Last year, Nosike, a physiotherapist from Nigeria, switched from a major national bank to the locally owned Webster Five, wanting a more personal relationship with her banker. As a Black business owner, she knows firsthand the challenges involved with getting financing: She had to sell a Worcester triple-decker just to get her business off the ground 14 years ago. Back then, Nosike couldn't get a business loan. "Not a penny," Nosike said. Now Nosike is one of just two identi- fied Black-owned businesses in Central Massachusetts among the nearly 18,000 local businesses who received loans from the $669-billion federal Paycheck Protection Program to help stay afloat through the coronavirus pandemic, ac- cording to a Worcester Business Journal review of U.S. Small Business Adminis- tration data. For Acclaim Home Health Care, its six-figure loan helped a few doz- en physical, occupational and speech therapists stay on the job at a time when many people might be reluctant to have visiting nurses in their homes. "If I didn't have the relationship I have with the bank I have now, I probably wouldn't have gotten it," Noskie said of her PPP loan. "at's why I changed banks. You find a lot of banks that say they support local businesses but when push comes to shove, they don't really." Few recorded loans to minority businesses When U.S. Congress created the PPP as part of the $2-trillion CARES Act as a lifeline for businesses, it directed the SBA to ensure underserved and rural businesses, including minority-owned companies, received priority in the pro- gram. Yet, in the SBA inspector general's review of the program in May, its report found that didn't happen. ose national findings rung true in Central Massachusetts, too. In roughly nine out of 10 cases, the race or ethnicity of a recipient's owner in Central Massachusetts was le un- answered. Details were also oen le blank for gender or veteran status. About three-fourths of all PPP loans didn't provide any demographic infor- mation because the information was not provided by borrowers, said Elizabeth Moisuk, the SBA's regional communica- tions director for its New England office. e SBA is working to collect more demographic information from borrow- ers to better understand which small businesses are benefiting from PPP loans, she said. Because demographic information was voluntary, only 35 Black-owned businesses in Central Massachusetts are reported as receiving PPP aid related to the pandemic. Of those 35, they were more likely to receive smaller loans than the average for Central Massachusetts companies. While 17.7% of area recipients received over $150,000, the rate was 5.7% for Black recipients. Black-owned business- es, at least in Worcester County, tend to be smaller than businesses over all, according to U.S. Census Bureau data, but not by that large of a gap. Mike Elmes, a business professor at Worcester Polytechnic Institute, called the Central Massachusetts data consis- tent with what he's seen elsewhere. "It's clear the minority-owned businesses have had very poor success getting PPP and small business loans," Elmes said. "is, despite that they are frequently asking for much less money than many non-minority owned businesses, strikes me as evidence for systemic racism in how these programs are being administered. e impacts on minority businesses are and will be devastating." Minority businesses outnumbered Very few businesses have Black own- ers to begin with, locally and nationally. In Worcester County, 0.8% of businesses have a Black owner, de- spite Black residents making up 6% of the population, according to the U.S. Census. Across Massachusetts, 1.4% of businesses are Black-owned, compared to 8.9% of the population. Nationally, those numbers are 2.2% and 13.4%, respectively. Of those Central Massachusetts businesses who specified the race or ethnicity of their owner in the PPP applications, 1,642 said they were white- owned. Another 157 were Asian-owned, 113 were Hispanic, and 12 were Native. at divide among races in loan re- cipients wasn't unique to Central Mass. Nationally, among those who received $150,000 or more, recipients were 45 Chizoma Nosike, the owner of Acclaim Home Health Care in Worcester, is one of 35 federal aid recipients in Central Massachusetts who identified their businesses as Black-owned. PHOTO/MATT WRIGHT

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