News and Observer
February 8, 2021
By Sophie Kasakove and Zachery Eanes
PPP DOESN’T SOLVE ALL PROBLEMS
Leonardo Williams, who runs the restaurant Zweli’s in Durham, said another round of PPP money would help.
But the program requires that 60% of the loan amount be used for payroll to be fully forgiven, meaning that he’ll still be behind on rent.
“Labor is not our biggest expense,” he said, especially in a time when everyone prefers take out and delivery. “Our biggest expense is food cost and rent.”
On top of that, he said, the process to get an application is overwhelming. He barely has enough time to run a restaurant. Now he’s confronted with hours of complicated paperwork.
“Honestly, we opened the application up two days ago and we couldn’t get through it. They are asking for so much more information,” he said. “You have to show how you used money from the last PPP and that is really tough. It’s going to take so much time to document.”
That has given businesses that can afford to have accountants on staff a huge leg up, he said. Zweli’s is dependent on him and wife deciphering exactly how to qualify for a grant and not just more debt.
Time is precious as well. After being behind months on rent, his landlord recently told him that he couldn’t wait much longer.
“It is traumatic,” Williams said of being a small business owner right now. “It is stress on our family. It is stress on us individually. The business is where we put all of our energy into and it is our breadwinner. It is how we live.”
The second round of PPP is already too late for many businesses.
Many minority-owned firms floundered during the pandemic because they are primarily in industries that need in-person interactions, like barber shops and restaurants, said Henry McKoy, director of entrepreneurship at North Carolina Central University.
Ultimately, that will exacerbate the racial wealth gap, McKoy said.
“The fact that so many Black businesses disappeared,” he said, “is going to have a huge impact on the overall social mobility of the Black community.”