
By Kassidy Arena, Iowa Public Radio News
The second round of the Payment Protection Program was supposed to focus more on minority-owned businesses. It has helped some, but others are still left out.
The Payment Protection Program (PPP) was meant to help small businesses survive during the COVID-19 pandemic. But it turned out many minority-owned companies were left out in the first round. The second round might be of more help to some Latino-owned businesses, but still leaves others out.
Luís and Jackie Castellanos own a food truck in Ottumwa: La Delicia Food. Jackie is originally from El Salvador and Luís is originally from Honduras. Jackie usually parks outside of office buildings and people line up outside for a quick and easy lunch of fresh food during their breaks. The truck was pretty profitable, but the COVID-19 pandemic changed everything.
Businesses started requiring employees to work from home. And, those companies canceled their contracts with Jackie.
“With what was happening with the pandemic, I had wanted to continue working but it was very difficult,” Jackie explained in Spanish. “The companies closed, well not closed but started working from home so they weren’t in the office like before. And that affected us a lot.”
She decided to help her husband Luís with his small, four-chicken farm while the truck was out of commission. But that meant the Castellanos and their five young children no longer had the extra income. They knew someone they could ask for help.
That’s where Himar Hernandez came in. He works at Iowa State Extension and is the assistant director for community and economic development. Part of his job is to help Latino-owned businesses survive the pandemic.
“So it’s really a lot about relationship building, knowing the culture, trust building and getting to know them by first name for them to trust you. And it’s always been a winning recipe for us,” Hernandez said.
He was the one who told Luís and Jackie about the PPP.
“We wouldn’t have known about it. We didn’t know about some of the things that were happening,” Jackie said. Luís followed: “Because we are not very aware of all that the government offers and how it can help.”
Once Luís and Jackie found out about the PPP, they applied. But Jackie said the process was not entirely simple. She had Luís’ help and even then, the bank asked her a lot of questions she did not know how to answer. With Hernandez’s help, they did end up with some funds, but not much. They only received $2,800.
Their chicken farm has now grown to 300 chickens and 40 cows, so they do not know if they will apply for the second round of PPP for their food truck, or for their ranch.
The average PPP loan for Iowa businesses was around $83,500 per company. A little more than 61,000 businesses in Iowa were approved for the forgivable loan program. The national average in August was about $100,000.
But the PPP doesn’t help every struggling small business. Hernandez said only 7 percent of PPP funds in Iowa went to Latino or Black-owned businesses. And only about 12 percent were approved for the entire amount they asked for. That’s why this time, the U.S. Small Business Administration (SBA) wanted to make sure those companies weren’t “shut out.”
Jayne Armstrong, the Iowa district director for the SBA, said many times underserved markets — that is Hispanic and Black-owned businesses — experienced more barriers during the first round of PPP.
“Particularly minority-owned businesses were kind of shut out from the first round, because in many cases, they did not have banking relationships. And just were kind of intimidated by the process in many ways,” Armstrong said.
In an attempt to fix the “shutting out” of the first round, the SBA only allowed minority-owned businesses to apply for the PPP during the first few days. Armstrong said they also focused on more community outreach and creating a lender match system.
But Hernandez said the program is still missing something.
“If you’re really wanting to reach out to underserved audiences, like Latino or Black or refugee businesses, women-owned, and yet you hold them to the same standard, then you’re missing the point,” Hernandez explained.
Many times, Hernandez said, those businesses don’t have the same access to capital or don’t have the same opportunities to build credit. So they should not be treated the same as other white-owned businesses.

Photo Tar Macias / Hola Iowa
Sandra Espinoza said her business has already been left out of this round of PPP. She owns Botanitas Isa-Abys, a small Mexican store in Ottumwa. She heard about the PPP through social media and from people in her community who talked about it. She applied for the second round of the PPP during the time set aside only for minority applications. She was denied a loan.
“You dream about being successful, and not having to get any free money from anyone. You don’t want that. But just the fact that you know, when you actually do need the help, and you don’t get it. That’s really upsetting,” Espinoza admitted.
Espinoza said she was denied because her store, which opened in 2019, wasn’t profitable enough to qualify for the PPP. She said she’s not going to give up. She is going to try to apply again with her numbers from 2020, but she said the process will be discouraging.
“And as much as I do want to, I almost feel like I shouldn’t, because I don’t want to be turned down again. You know, like, I don’t want to feel like I’m begging them to help me. Nobody should feel that way,” Espinoza said.
Espinoza did not apply to the first round of PPP because she said other businesses in her community needed the help more, and she doesn’t regret that. More than 50 small businesses in Ottumwa applied and received funds from the first round of the PPP.
But COVID-19 lasted longer than she thought. And now, she and her husband don’t know if the business will survive without a loan.
“I think we’ll have to sacrifice some things like, probably one of us is gonna have to get a job somewhere, and see how long we last with that,” Espinoza said.
Espinoza said she hopes her story will help people understand the PPP. And even if her family business doesn’t survive, she hopes other minority-owned companies, like the Castellanos’, will get the help they need.