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Top Four Reasons Small Black Owned Businesses Are Denied PPP Loans

Great news for small black-owned businesses, recently the US Senate passed a bill to extend the PPP ( Paycheck Protection Program) until August 8th, 2020 to tap into the $168M of unclaimed funds. While this may be great news, yet still a lot of minority pwned businesses will miss out because they are not in compliance to qualify for funding.  The Paycheck Protection Program established by the CARES Act is implemented by the  Small Business Administration with support from the Department of the Treasury. 

This program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities. Our purpose at is to empower small black-owned businesses by sharing important information and resources that will set them up for success.

When working with many businesses we see a pattern that small minority-owned companies are out of compliance and as a result will not qualify for the Paycheck Protection Program. It is important that black-owned businesses set their companies up properly so that they can receive access to resources and funding opportunities that are needed to grow and thrive.

These are the top four reasons why small black-owned businesses get denied for the Paycheck Protection Program: 

Active/NonCompliance with the State Secretary

We see many companies that may have registered with the Secretary of State but are listed as active but non-compliant. This means that they have not paid the annual renewal fees. Companies must pay their annual renewal filing fees in their registered state in order to be in full compliance.  This is important because the lender will verify state compliance in their due diligence protocols. We have seen companies get denied because they were listed as active/non-compliant. Log on to your Secretary of State site where your business is registered and review if annual renewal filing fees are current. 

Not Having a Business Bank Account

When applying for the Paycheck Protection Program, many lenders will ask for your business bank account information particularly your February 2020 bank statement. The account will be used to also deposit the funds into the account once funding is approved. This also depends of course on the type of business structure of the company. If your business is a Corporation you absolutely need a business bank account, especially if you wish to apply for a PPP loan/forgiveness. You want to put your company in the best possible light by having a valid business bank account.  

Improper Taxes

One of the requirements that must be met when applying for the Paycheck Protection Program is to submit proper taxes. If you have no taxes at least prepared and even better filed you must prepare 1040 with a Schedule C and a 940/941 form especially if you have W-2 employees. Keep in mind if the taxes show that the company has made less than $2,700 for the year your company will not qualify for a PPP loan/forgiveness. Many companies tend to show a loss for the year when filing taxes. Showing a loss on Schedule C will not benefit you when applying for funding or assistance.

No Valid Business Address

If your company does not have a business address you really should consider getting one. A valid business address makes your company legit and more importantly in compliance. Now while having a valid business address this is not a requirement for applying for the Paycheck Protection Program, but it certainly will make your application much stronger than if you don’t have a valid business address.

The Cares Act was passed to offer assistance to businesses affected by the COVID-19 pandemic to get access to funding but, remember that there are some basic guidelines that you should be aware of in order to get funded. 

Remember that you are still applying for a loan even though they say it is forgivable.

Always keep in mind that whenever you apply for a loan you must not give the lender a reason to say no. One powerful way to do that is to have your company in compliance.

One other thing that is very important though not a requirement for the Paycheck Protection Program, you should consider getting a conventional website for your business if you do not have one. 
Truthfully you are not really in business if you do not have a website. You will also need hosting for your website and along with an email server that you can send and receive emails to and from your corporate address.  

Doing this will make your company look like a real player in the market. Websites today are relatively very cheap. You can even get a free website but not recommended. 

If you would like to discuss how we can help your business get access to more resources please feel free email me at

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