Small minority-owned businesses have been disproportionately affected by COVID-19. Minority-owned businesses are more likely than non-minority businesses to have difficulty obtaining loans, to voice fears of shutting down permanently, and to forecast lower revenues the following year.
Michael Pugh is the President and CEO of Carver Federal Savings Bank, a 72-year black-owned banking organization. It is one of the largest African-American managed and listed institutions in the country. The Carver Bank is located in Harlem but also has branches in Brooklyn and Queens.
“And so what we have seen and the data tells us is that over 41% of these small black and brown businesses have closed their doors or will be closing because they will not be able to recover from the deaths and loss. of income. associated with the pandemic. And so, when you think about the dramatic impact of small businesses that have gone bankrupt because of a global problem that has changed the lives of all of us, we know what those businesses will need is capital for them. help them straighten up and try to get back on their feet, âPugh said.
Banks such as Carver have been able to acquire cash through the Rapid Response Program to support small businesses and general demand in the areas they serve. Through this program, CDFI-certified financial institutions, which stands for Community Development Financial Institutions and is a designation of the US Treasury, will be able to use this capital to support community development, which plays an important economic role in many cases.
The Greater Chamber of Harlem Commerce has partnered with Carver Bank to help small businesses, nonprofits, and cultural organizations that have been turned down by large banking institutions by directing them to Federal Carver Savings Banks. The Greater Harlem Chamber of Commerce referred people in need of financial assistance to the Carver Federal Savings Bank in hopes of establishing a relationship with the bank that would allow business owners to better meet their needs.
âIt is now well known that the COVID pandemic has devastated small businesses in particular, and nonprofit, cultural and educational organizations and health organizations and communities of color across the country and beyond. As for New York City, it is conservatively estimated that 43% of all small businesses in New York City that have been affected by the COVID pandemic will not reopen. And so it will have a devastating impact on the small business sector, on employment in our communities and on the services provided by the small business sector to their service area, âsaid Lloyd Williams, Speaker of the Grand Chamber of Harlem trade.
Since many businesses of color, especially black and brown businesses, do not build strong and meaningful relationships with financial institutions, and the nature of small businesses makes it more difficult for them to receive loans. or PPP grants, according to Williams. Many of them lack the supporting infrastructure of accountants, CPAs, and lawyers who can help them apply for government funding and obtain funding from financial institutions.
Carver Bank was committed to providing COVID relief to minority small business owners. Through the Paycheque Protection Program, they worked closely with minority women and entrepreneurs for the programs; they have a partnership with the MTA which has enabled them to provide more than $ 23 million in access to capital to women and minority entrepreneurs looking to participate in large contracts with the MTA. The program has enabled many minority entrepreneurs and small businesses who did not qualify for MTA projects, due to lack of capital, to access and participate in capital.
Carver Bank is also developing a small business micro-lending program that will assess and support small businesses without relying entirely on traditional credit scoring.
Many newer Carver Bank clients have come to them because of their prompt response and assistance, as well as their patience in guiding them through the process of applying for the various stimulus programs and measures available. Carver Bank is also very accessible in the minority communities of Manhattan, Queens and Brooklyn.
âWhen we think of organizations like Dream Academy which is located in the charter school in East Harlem, being able to provide them with support through the Paycheck Protection Program, helping to preserve a significant number of jobs because charter school has a huge impact on the communities of Upper Manhattan, East Harlem. Along the Malcolm X Corridor and Frederick Douglass Corridor, I would say there are many companies that Carver Federal Savings Bank is proud to say are customers and have been our customers for many years, âsaid Pugh.