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Home›Latino Loans›Restaurant revitalization fund designed to be fairer than paycheck protection program

Restaurant revitalization fund designed to be fairer than paycheck protection program

By Eric P. Wolf
June 1, 2021
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At the start of the pandemic, government assistance to business owners was not distributed fairly to minorities. As new federal funding, the Restaurant Revitalization Fund, rolls out, area businesses and community members are hoping that the lessons from the botched rollout of the Paycheck Protection Program (PPP) will make this round of funding fairer.

It’s hard to tell if PPP the loans were given fairly because most of the business owners who applied did not include their race. But some researchers have found ways to examine how funds were fairly distributed to businesses during the pandemic.

“Many business owners are just not ready to tap into what would be traditional means of awareness. – Tenecia Johnson, Detroit Economic Growth Corporation

A research team used the Coronavirus Tracker from the University of Southern California’s Understanding America study to survey a nationally representative group of 6,300 people. They asked business owners, entrepreneurs and self-employed with employees if they had received government assistance between March and May 2020. What they found was a disparity for black business owners.

“We found that less than half of 1% of black business owners received these funds, compared to about 9% of non-black business owners, ”says Felix Kabo, a faculty member at the Social Research Institute of Canada. the University of Michigan and responsible for the study. “In other words, black business owners were 30 times less likely to receive these government funds.”

Analysis by Reveal Reporting Network in partnership with Michigan Radio found white neighborhoods were accepted PPP loans at 1.3 times the rate of predominantly black communities and twice the rate of predominantly Latin American communities. The conclusion was drawn by dividing the census tracts by their predominant race, then looking at the estimated number of businesses there and the number of businesses actually received. PPP ready.


Listen: The Detroit Economic Growth Corporation is asking to promote the Restaurant Revitalization Fund.


There are a number of reasons why minority-owned businesses may not have received their fair share of government financial assistance so far during the pandemic. Kabo says more black companies have received PPP loans in the second phase than the first, indicating that it may have taken longer for information about the program to reach these companies or, possibly, for black homeowners to complete their applications. Additionally, Kabo says he has spoken to several lenders who have said that some minority companies are not “ready to lend,” meaning the companies do not have the financial information that lenders want to see before they do. ‘issue funds. And some minority business owners were at a disadvantage because they had never worked with a traditional bank or lender before.

“There was this correlation between having an existing relationship between the borrower and the financial institution and receiving PPP and other government funds, ”Kabo explains. “Financial institutions are more likely to favor loans to business owners with whom they already have a relationship. “

Laura Herberg /WDET

J’s Cafe in northwest Detroit, one of the businesses Tenecia Johnson stops at with information about the Restaurant Revitalization Fund.

Have any lessons been learned?

Although the deployment of PPP loans were defective, the government has a second chance to distribute the funds more equitably. Enter the Restaurant Revitalization Fund, a new opportunity for small businesses part of the US bailout passed by Congress in March. This federal fund, distributed by the Small Business Administration, aims to help food establishments recoup the finances they lost in 2020, and was designed to do so more equitably than previous pandemic funding.

First, he addresses the issue of lenders raised by Kabo. This time around, companies can apply directly through the Small Business Administration; they don’t have to apply through a financial institution they may never have spoken to before. Second, the Restaurant Revitalization Fund has a special window period specifically for underserved business owners.

“The first 21 days, food businesses owned by minorities, women, veterans or economically disadvantaged communities are eligible for priority consideration, ”said Tenecia Johnson, Liaison Officer for Detroit. Economic Growth Corporation (DEGC).

In order to publicize the Restaurant Revitalization Fund, the DEGC speaks face to face with qualifying businesses across town. Johnson is leading the effort for the northwest corner of Detroit where she oversees a team of volunteers and also volunteers.

Tenecia Johnson from DEGC stops by J's Cafe to tell them about the Restaurant Revitalization Fund.  Laura Herberg / WDET

Laura Herberg /WDET

the DEGCTenecia Johnson stops by J’s Cafe to tell them about the Restaurant Revitalization Fund.

Johnson’s first stop is J’s Café, a soul food restaurant on the corner of Grand River Avenue and Burt Road. The establishment is known for its salmon cakes and turkey chops. Inside there is a long white counter and a few booths. A few tables are draped in warning tape to meet social distancing requirements in place at the time. Johnson drops a package in front of Jaclyn Thomas, the owner’s daughter who is also a manager and waitress.

“This is the Restaurant Revitalization Fund. It’s a fund that’s available for food businesses like this, where you can get up to $ 5 million per location. So this is a huge one. Don’t miss this opportunity to be able to take advantage of the access, ”Johnson told Thomas.

When the PPP ready came out, the DEGC tried to get the word out, mostly online, building on pre-established relationships and partnerships. But this time they are trying a more practical approach.

“Many business owners are just not ready to tap into the traditional means of outreach, which is email lists perhaps from some of the larger chamber of commerce organizations that they are not connected to, or may be. -being start-up networking groups that many minority or women-owned businesses may not have direct access to, ”says Johnson. “So doing this work, especially for this fund, is essential because we are the priority group. “

Be in the loop

That’s not to say that there aren’t many businesses that fall into the priority group that are already in the loop. Take for example Johnson’s next stop, Sweet Potato Sensations. The Detroit institution sells a wide variety of sweet and savory dishes made with orange tubers. Inside the store, which has creamy orange colored walls, Johnson walks up to Espy Thomas, the owner’s daughter who says her official title is “Queen of Awesomeness.” Thomas says everyone made sure his family knew about the Restaurant Revitalization Fund.

Tenecia Johnson at Sweet Potato Sensations in Old Redford, Detroit.Laura Herberg / WDET

Laura Herberg /WDET

Tenecia Johnson at Sweet Potato Sensations in Old Redford, Detroit.

“When the fund came out, it was like hellish emails from everyone, ”says Thomas. “Detroit Means Business, City of Detroit, you … I mean, I think the NAACP maybe sent something! Everyone was sending like, “Get this money if you can get it!” “

Thomas says Sweet Potato Sensations led the board and applied as soon as possible for the Restaurant Revitalization Fund. But they didn’t understand it.

“It was like, ‘Zero.’ I was like, ‘What are you talking about, zero?’ Thomas says.

Turns out the bakery / cafe hasn’t received any funds, in part because they’re in so much demand. It was one of the few black-owned businesses to receive a PPP loan last year, and in doing so, they made too much money in 2020 for their business to be eligible for the Restaurant Revitalization Fund. Thomas says Sweet Potato Sensations could still use the financial boost, but she is Okay by missing the opportunity.

“You know, what I really believe is that what’s for us is for us. I do it honestly. And sometimes it’s disappointing. But maybe there is someone else who did not qualify for PPP who really needed the funds, ”says Thomas.

“When the answer can’t be yes, it’s very damaging, ”said Johnson, back in the car. “We have no control over whether or not to approve your request. So we can only do awareness and support. “

Johnson says that all over town the DEGC alerted more than 300 companies about the Restaurant Revitalization Fund. The special priority window ended on May 24, which means the fund is currently open to all eligible businesses until funding runs out. Only then will stakeholders find out if the money has been distributed more fairly this time around.

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