(This column originally appeared in The Philadelphia Inquirer)
Twenty “historically disadvantaged” Philly businesses will be chosen to receive $50,000 zero-interest forgivable loans to help them create new jobs and boost revenue.
The funding comes from the second round of Boost Your Business financing, provided by the Philadelphia Department of Commerce and the PIDC, a public-private economic development partner.
To be eligible, businesses must be considered “historically disadvantaged,” meaning they are “at least 51 percent owned by individuals who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of groups and without regard to their individual qualities, such that their disadvantage stems from circumstances beyond their control,” according to the Department of Commerce.
According to a 2022 study from the Federal Reserve, white business owners were more likely than Hispanic, Black, or Asian owners to be granted financing. The same study also found that firms owned by people of color were around twice as likely as white-owned firms to describe their financial condition as “poor.”
“In the city, like many other parts of the country, there are a number of historically disadvantaged business owners that have a harder time getting access to capital,” said Yvonne Boye, a deputy commerce director at the Philadelphia Department of Commerce and one of the creators of the Boost Your Business program. “This program is one of the many that the Department offers to help address that issue.”
Businesses applying for the second round also must:
- Be at least two years old
- Be located in Philadelphia
- Generate more than $350,000 in annual revenue
- Have a Philadelphia Business Income and Receipts Tax Number, a city Commercial Activity License, and all other required federal, state, and local licenses and permits to legally operate
- Be independently owned
- Be up to date with their local, state, and federal taxes (or on an approved payment plan or in the process of getting an approved payment plan).
According to Boye, 20 businesses will be chosen by a committee and offered the no-interest loan, which will be forgiven when the business meets its stated growth goals. The chances of the loan being forgiven are high, thanks to the technical support and close supervision provided by the city to the awardees, Boye said.
“None of the first round’s recipients were required to pay back their loans,” she said.
Applicants will be required to submit a formal growth plan, as well as credit authorization forms, government issued-IDs, two years of federal tax returns, historical financial statements, debt schedules, projections, and business organization documents, including fully executed bylaws and articles of incorporation.
Boye says that while all businesses are eligible and no specific industries are being targeted, the program is looking for businesses that are poised for growth. She also wants to attract more business-to-business companies, like contractors and manufacturers.
“We are expecting job creation and increased revenue,” said Boye. “We are also hoping that this award will help recipients to get contracts either with the city or major institutions.”
Angie Millan, the owner of Angie’s Auto Tags Inc. in Feltonville, was a first-round recipient of the program and used the funds to hire essential employees from her community to help her grow the business.
“With the grant, I was able to implement crucial improvements and expand my operations, which directly contributed to securing new contracts, generating increased revenue, and fostering employee growth,” she said. “As an entrepreneur from an underrepresented background, accessing resources and opportunities has been a challenge, particularly during the COVID-19 pandemic. However, the funding provided by the program has allowed me to scale my business and overcome these barriers successfully.”
Marcos Tlacopilco and Alma Romero, the owners of Marco’s Fish and Crab House in the Italian Market, said that the funds they received from the program were instrumental in renovating both the facade and the interior of their store, and for purchasing much-needed equipment.
“It takes a lot of work to be a business owner, especially in the city,” Tlacopilco said. “With programs such as Boost Your Business, we were able to overcome some of the barriers and level up the opportunities.”
Applications are due by July 31 and can be submitted online. An online informational session is also being held by the Department of Commerce on July 17.
