Local First Blog

Northern Initiatives working to fix PPP disparity

May 5, 2021 9:12:01 AM / by Northern Initiatives

Did you miss out on the first round of the Payroll Protection Program? Northern Initiatives can help!

  • We're offering first time PPP loans to businesses that have been left behind in previous rounds.  However, if a company has already received a PPP loan they should go back to their original institution.  
  • PPP loans can become grants if the funds are used correctly.  We will provide technical assistance to make it likely this will happen.
  • The federal application deadline is May 31.  Businesses are encouraged to apply by May 15 so that we have the best chance of processing their application on time.
  • Don't give up hope! We'll walk you through the process. 
  • Apply here and make sure to write "PPP" in the notes box.

The Paycheck Protection Program has been a lifeline to many during this pandemic, but it can also be frustrating, especially for microbusinesses, sole proprietors, and farms. It’s understandable, of course. Big banks had more assets available and lending relationships with larger businesses. Some of the smaller businesses were passed by.

We wanted to fix that disparity, so we reached out to colleagues, friends, and partners to find businesses that had been left behind. The response has been so gratifying.

In February and March 2021, we helped 29 small businesses in 18 Michigan counties get PPP funds.

The average loan was $11,399. Almost half (48%) of the funds went to diverse borrowers and 72% went to new-to-Northern-Initiatives borrowers.

We’ve met business owners who had been living off their retirement savings because they didn’t have money to pay themselves. We’ve worked with farmers to make sure they have food on their own tables. We filled a gap and their gratitude has strengthened us. “What an incredible difference this program is making for businesses and families,” said Elissa Sangalli, Northern Initiatives president.

Here are some of their stories.

Shannon Cohen

Shannon Cohen, an inspirational speaker, and entrepreneur needed some inspiration of her own. After months of applying for pandemic relief funds, she had yet to receive one dollar. “Sometimes we were finalists, but we never got a grant.” Her Tough Skin, Soft Heart brand started as a blog in 2014 and has evolved to include a podcast, books, public speaking, and inspirational greeting cards.

The business turns 5 this month.

“I have an all-woman staff, many who are heads of household,” Cohen said. She told them early on: No furloughs. Then she decided the energy she’d been putting into grant applications was better directed at helping her business flourish. “I just stopped applying. I was jaded. I saw the data that showed the inequities in lending.”

According to the Center for Public Integrity, the largest eligible businesses got their money first, while businesses trying to get loans under $50K had to wait weeks or months. Plus, most PPP loans went to businesses in communities that already had more access to resources, and loans didn’t reach a great share of businesses in the lowest-income communities.

Cohen inspired herself and her staff with clever innovations, including a robust online presence. Her line of cards was picked up by Target in 2020 and is available at 1,700 stores. She continues to stick to her mission of “curating products, places, and experiences that nourish the soul.” But she never got “the dollars.”

Early in 2021, Elissa Sangalli, president of Northern Initiatives, reached out to Cohen about PPP loans. They’ve known each other from Grand Rapids business and leadership circles for years. Cohen also knows former NI president Dennis West, who was her mentor when she was in the WKKF Community Leadership Network Class with the W.K. Kellogg Foundation.

“At first I said, ‘Nah. I’m OK,” Cohen said, remembering her frustration with earlier applications. “But then it came down to the relationships.” Because of Sangalli and West, “I said, ‘I’ll do it.’ It was a wonderful experience! It restored my faith.”

Cohen received her PPP funds and was especially happy to find out that, if the funds are used properly, the loan turns into a grant. It helps her keep her business as debt-free as possible. Cohen has four contract employees and two high school students who work in fulfillment. Her Rockstar Woman Brunch is in its third year, bringing together women leaders from around the country for empowerment and networking. In 2020, close to 400 people attended from 18 states and Canada.

El Granjero

Running a restaurant is like raising a baby, said Paola Mendivil. “You have to care for it, take care of it.” There have been times during the past year – with shutdowns, protocols, capacity changes and more – that she did feel like throwing in the towel, but El Granjero, an authentic Mexican grill in Grand Rapids, Mich., is her baby.

Before the pandemic, the restaurant employed 23 to 24 employees, most of them full-time. When the first shutdown came in March 2020, that number was reduced to 10 and carryout was king. When restaurants were allowed to open at 25% capacity, El Granjero waited a few weeks before welcoming guests indoors. Then they brought back some servers (there are currently 15 employees) and things have been going well. Still, about 75% of the orders are for take-out food.

And now Mendivil and other small business owners are worrying about another possible capacity change or shutdown, as Michigan’s COVID case numbers climb.

One of Mendivil’s outlets is her small business group at the West Michigan Hispanic Chamber of Commerce (WMHCC). “It’s like our therapy,” she said of the weekly meetings. The business owners in the Transformando group gather on Zoom (for now) to learn about food safety, financial literacy, human resources and more, but they also vent - and support each other. “It’s the community component that has gotten us through,” she said.

And it was through the WMHCC that she found out about Northern Initiatives and how they could help her get a PPP loan. She had tried before in 2020 but paperwork snafus and a bank ownership change didn’t help. Israel Flores, a business development specialist for NI based in west Michigan, talked to the small business owners at one of the Transformando meetings, explaining how to get the PPP process going. Flores then talked Mendivil through setting up an account and reminding her what files were needed next.

“I felt bad that he had to keep calling me for more information, but he said not to worry,” Mendivil said. “It really was a team effort.”

The PPP loan the restaurant received is Northern Initatives’ biggest PPP loan to date.

“The same day we had the call to review and sign the documents, within hours the money was in our account,” Mendivil said. “It is such a relief, a cushion.”

Tags: Inclusive Economy, Business Resources