Worcester Business Journal

10 Worcester Business Journal | May 16, 2022 | wbjournal.com PHOTOS | MATT WRIGHT PPP's legacy e COVID-era assistance program provided 20,000 loans totaling $1.8B in Worcester County BY ALEXANDER MACDOUGALL WBJ Staff Writer M ore than two years ago, small businesses across Greater Worcester and the nation faced a dev- astating and unexpect- ed blow to their operations. e COVID-19 pandemic caused thousands of businesses across Worces- ter County to temporarily shutter, many ending up having to close their doors for good. Businesses deemed non-essential, such as restaurants and hotels, felt the brunt of the economic restrictions the federal and state governments imposed to minimize spread of the virus. One of the main responses from the federal government and the U.S. Small Business Administration was the Paycheck Protection Program. e loans were first distributed in 2020 around the beginning of the pandemic, with an additional round in 2021. Initially, 75% of loans were to go toward paying employee wages, but this was eventually lowered to 60% to allow businesses to pay additional overhead costs. Overall, more than 20,000 PPP loans for a total of $1.8 billion were given out to businesses across Worcester County, with more than 4,800 and $450 million of those loans going to businesses within the city of Worcester, according to data from the SBA. ose loans went toward paying the wages of more than 150,000 jobs in the county, including more than 35,000 jobs within the city of Worcester. "It shows how important it was for our economy to be able to rebound," said Alex Guardiola, vice president for government affairs and public policy at the Worcester Regional Chamber of Commerce. "I don't think that the ma- jority of these companies that are open now would be open without them." Dispersing the funds Local banks in Central Massachusetts played a crucial role in ensuring busi- nesses in the area were able to secure the loans they needed, Guardiola said. "Now, you can imagine that every business across the spectrum, regardless of industry, was trying to apply for those PPP loans. So we worked very hard with our small community banks here in Worcester to help navigate through these loans," he said. Banks headquartered in Worces- ter County and MetroWest wrote the majority of loans for small businesses in the area, according to the SBA data. In Jose Zuniga received a $10,000 Paycheck Protection Program loan during the second round of the initiative. S M A L L B U S I N E S S FOCUS Worcester County, local bank lending was led by UniBank in Whitinsville, with $107 million in SBA loans, followed by Cor- nerstone Bank in Worcester with $99 million and Web- ster Five in Auburn with $82 million. Businesses identified as female- or minority-owned businesses received lower amounts on average than businesses that either did not identify themselves or identified as being owned by white men, according to the SBA data. "It was working-class communities that were hardest hit, while also receiving some of the least in terms of financial as- sistance," said Kareem Kibodya, co-poli- cy lead at the Black Economic Council of Massachusetts. Businesses that identified as female-owned in Worcester received on average around $55,000, around half that of businesses that identified as being male-run, according to SBA data. Black-owned businesses got on average about $32,000, a third of what businesses identified as white-owned did. Local banks didn't have the same kind of close-knit relationships with local communities of color as they did with white-owned businesses, causing minori- ty-business owners to be more reserved when asking for loans, Kibodya said. "Whether its historical disparities due to redlining or current issues of access to capital, if you don't feel if you have that relationship with your local bank, or ev- ery time you go there you feel that you're not necessarily welcomed with open arms, you're going to be a little hesitant to go there in the future," he said. Worcester County PPP loans, by race Source: U.S Small Business Administration Unanswered $1,359,460,686 14,285 $95,167 White $434,773,092 4,740 $91,724 Hispanic or Latino $27,747,014 579 $47,922 Asian $27,379,920 563 $48,632 Black or African American $13,261,352 439 $30,208 American Indian or Alaska Native $3,671,703 49 $74,933 Native Hawaiian or Other Pacific Islander $1,206,792 6 $201,132 Total loan Total Amount Race amount loans per loan Alex Guardiola, vice president, Worcester Regional Chamber of Commerce Kareem Kibodya of the Black Economic Council of Massachusetts

• Cover