Black Business Hit Hard By Coronavirus Pandemic Denied PPP Loan
ST. PETERSBURG, FL — It took African American business owner Elihu Brayboy three hours to fill out a Paycheck Protection Program loan application through Bank of America's website after the coronavirus pandemic hit, and 10 minutes for Bank of America to deny the loan.
Brayboy's restaurant, Chief's Creole Cafe located in South St. Petersburg, has been a depositor with Bank of America for six years — the business opened in 2014. However, Brayboy said that Bank of America's reason for denying the loan was because he was not a banking client of theirs.
"The predatory ... lending practices of America glared its ugly head up on us again, because we understood it's hard to get bank financing as an African American business doing business in an African American community," he told Patch.
When he started Chief's Creole Cafe, Brayboy said he struggled to get financial backing to open the business. Entrepreneurs told him he was crazy for opening a restaurant in an African American community versus Central Avenue in downtown St. Pete because they doubted the African American community would support the venture, and white people would not venture to south St. Pete.
A Bank of America official told Brayboy that since he wasn't an established business and not in a profitable area, they could not loan him money.
However, Brayboy said that six years later, 65 percent of his clientele is white and the other 35 is black. His customers come from Tampa, Brandon, Tierra Verde, Safety Harbor and around St. Pete.
Time reported that across the country, African Americans are disproportionately suffering from the impact of both the coronavirus and its economic fallout, and have struggled to access federal aid programs designed to mitigate the damage caused by coronavirus shutdowns.
A set of conditions that have favored larger businesses, including many banks only approving loans for existing customers and delaying the application of sole proprietorship, have shut out minority-owned businesses, reported Time. For those that have received loans through the program, advocates worry some of the conditions may make it harder for many to qualify for their forgiveness, potentially saddling them with years of debt.
At the beginning of the pandemic, after being considered ineligible by Bank of America, Brayboy said he could have gone to another major financial institution. But because there are no major banks in the boundaries of the African American community, he felt like he would get the same response.
"When I filled out the online PPP loan application, it asked what my race is," said Brayboy. "What does that matter if I am black or white for a loan? How does that make my credit good or bad, or determine how much money I have?"
Brayboy and his wife were forced to cut the hours of the restaurant and underwrite payroll out of their own pocket so that they could survive, and not lay off staff members. Business has been slow since the pandemic started; however, it has started to pick up since the George Floyd protests that started in St. Pete on May 30.
"The recognition of this movement now — because of George Floyd — has gotten people to acknowledge that they need to do something to help African American businesses," Brayboy said. "This is helping us a lot because we're getting business that we normally wouldn't get."
Tampa Bay Black Business Investment Corporation is the only approved funding Brayboy said he has received for his business during its six years of operation.
Patch has reached out to Bank of America for comment and will update this article when we hear back.
For more information about Brayboy's New Orleans style restaurant, visit Chief's Creole Cafe.
This article originally appeared on the St. Pete Patch
