Black Pastors Say They Are Not Receiving Funding from SBA Loan Program Despite Applying and Are Struggling Because of It

Rev. James Perkins of Greater Christ Baptist Church is one of several black pastors in Detroit who were unsuccessful in their SBA loan applications. Courtesy James Perkins

A new government program that funnels taxpayer money to churches, synagogues and mosques has brought welcome relief to some financially stressed houses of worship, while leaving others — many of them serving communities of color — still struggling to survive.

“It’s a huge boon for us,” said Father Carl Beekman, parish priest at the Church of St. Mary, which serves about 1,300 families in Sycamore, Ill. Beekman learned this week that his church will receive a loan under the Paycheck Protection Program administered by the Small Business Administration.

With that assistance, part of a coronavirus rescue package enacted by Congress, Beekman does not anticipate that any parish employees will have to be furloughed, even though money collected through church offerings is down significantly as a result of being closed.

Thousands of churches around the country are benefiting from the program, though the SBA is not releasing precise numbers.

“I was a little surprised that nonprofits and churches could take part,” said Paul Ott, chairman of the administrative council at Grace United Methodist Church in Dallas, Texas, which was approved for a PPP loan of about $52,000. If the program rules are followed, the loan will not have to be repaid.

“This was very helpful to us,” Ott said. “[This year] was not going to be a good year for us. We knew we were going to be in real trouble.”

Less fortunate was Greater Christ Baptist Church in Detroit, which has a predominantly African-American congregation.

“We applied when the program first became public, but we did not receive any funding,” said Rev. James Perkins, the church pastor. As a consequence, Perkins has had to lay off most of his nine church employees, and he has asked the remaining staff to take salary cuts. His experience was shared by other black pastors in Detroit and across the country.

“I haven’t taken any scientific survey, but a number of black pastors with whom I have relationships in Detroit are concerned, because they did not receive funding,” Perkins said.

Among them is Rev. Kenneth Flowers, pastor at Greater New Mount Moriah Missionary Baptist in Detroit.

“We tried to submit an application to our bank, but they kept saying they were not ready,” Flowers said, “and then we got an email saying all the funds have been deployed. We’re discovering that there’s a pattern here of minority businesses and black churches not receiving the funds.”

Nationwide concern

“We have representation from all of our nine major African-American denominations,” said Derrick Johnson, president and CEO of the NAACP. “Most of them have complained about the lack of responsiveness from the banks to which they have submitted applications. These are churches from San Francisco to Detroit to Florida to Connecticut. We hear a consistent concern from church leaderships across the country.”

In all, the SBA approved nearly 1.7 million PPP loans. No data have been collected that would indicate a racial disparity among the successful recipients. The New York Times and Wall Street Journal have both reported that large enterprises with established connections to big banks were far more successful than were small businesses — or churches — with less experience dealing with financial institutions.

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SOURCE: NPR, Tom Gjelten