Hispanic business owners who are struggling financially during the coronavirus (COVID-19) pandemic may not be aware financial assistance is available or may not have been able to access funds from other financial institutions.
This is an opportunity for credit unions to help those business owners obtain funding through the Small Business Administration’s Paycheck Protection Program (PPP).
To do so, credit unions must build relationships with these individuals, gain their trust, and educate them about the program, a panel of credit union leaders said Thursday during “Reaching Hispanic Small Businesses: COVID-19 Crisis,” a webinar presented by Inclusiv.
“There’s still plenty of time to make a difference for businesses that are struggling right now,” says Jeff Ivey, president/CEO of $109 million asset River City Federal Credit Union in San Antonio. “This is a long-term situation and it’s a huge opportunity for credit unions to step forward and do the right thing.”
River City Federal, which has a membership that is about 60% Hispanic, has funded 257 PPP loans for $8.94 million and impacted 1,305 jobs. The smallest loan was for $1,200, which allowed the business owner to pay rent and utilities during the pandemic, Ivey says.
“There are still thousands of businesses, especially in the Latino community, that need help and don’t know where to turn or where to start,” he says.
River City Federal worked with its community partners to share information about PPP, how to apply, and the possible benefits, Ivey says. Thirty-percent of the loans processed were from applicants who spoke only Spanish.
“All of those community partners played a critical role,” Ivey says.
Notre Dame (Ind.) Federal Credit Union began its PPP efforts by educating the community and its members, says John Wilkening, chief retail officer of the $671 million asset credit union.
The credit union has funded 992 PPP loans for $178.1 million and impacted 20,000 jobs. Wilkening says those efforts were because the credit union was “quick, agile, and ready to move” when PPP funding became available.
“It’s a trust issue,” Wilkening says. “The big banks are going to put the onus on the borrower. Credit unions need to go into the Latino market and tell them ‘we’re going to help you get through this.’”
Staffing branches with employees from the same background and culture can be critical in reaching out to and serving the Hispanic community.
“It comes down to understanding the culture, seeing the challenges, and then responding appropriately,” Wilkening says. “It’s about education, trust, and a familiar face—someone who has walked their journey is now helping them.”
PPP funds are still available to assist Hispanic and other business owners. It’s an opportunity for credit unions to step up and be a resource during the pandemic and in the future.
“This is a moment to shine for credit unions,” Ivey says. “[PPP] is still open and we can still do some great things.”