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Advocates for entrepreneurs of color press the Legislature for $1 billion in stimulus funds

Group calls for aid to small businesses that have struggled amid the COVID-19 pandemic

Segun Idowu is the executive director of BECMA and a leader of a coalition urging state lawmakers to direct federal COVID stimulus money to small businesses and communities of color in Massachusetts.Suzanne Kreiter/Globe staff

A coalition representing entrepreneurs of color is pushing the Massachusetts Legislature for $1 billion in federal stimulus funds to help small business owners bounce back from the COVID-19 pandemic.

The Coalition for an Equitable Economy has sent a letter to the committees overseeing stimulus deliberations on Beacon Hill, asking for a $1.1 billion investment in small businesses across the state. Nearly all of that money, $964 million, would come from the $5 billion pot of American Rescue Plan Act funds overseen by the Legislature. An additional $136 million would come from a separate small-business credit program, likely also funded by federal stimulus dollars.

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“This is one of the only times in our lifetime that we will have this huge infusion of financial resources to create a new world,” said Segun Idowu, president of the Black Economic Council of Massachusetts and a member of the coalition. “We’re telling everybody that if you want the business owners in your district to still be business owners next year, you have to put out money right now.”

The coalition’s proposal represents just the latest in a long line of requests for the $5 billion in federal money, a tally that far exceeds what’s available.

Other business groups are seeking up to $2 billion in unemployment insurance relief, to reduce the $7 billion employers need to pay over the next two decades to support the state’s jobless benefits fund after it was drained in 2020. Many are also backing some of Governor Charlie Baker’s priorities, especially his call for $1 billion for housing construction and home-buying aid and $240 million for skills training.

The business equity coalition, meanwhile, is urging help for businesses in lower-income areas and those owned by people of color, to keep them from falling further behind during the economic recovery.

Some members of BECMA are seeing boom times right now, Idowu acknowledged. But many more are suffering — their stores, restaurants, and salons hit hard by the pandemic and yet to recover from the shutdowns of 2020.

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“The majority of our businesses are in these low-growth industries that require in-person human contact,” Idowu said.

The coalition is asking for $300 million in small-business grants, relief that could be prioritized for hard-hit industries or demographic groups, similar to a roughly $700 million small-business assistance program overseen by the Massachusetts Growth Capital Corp. during the past year.

“Many business owners have lost thousands of dollars, if not their entire business, because of the safety precautions we all had to take,” said Joe Kriesberg, a coalition member and head of the Massachusetts Association of Community Development Corporations. “We need to make the small-business community as whole as possible coming out of this. … For those who have hung on, let’s help them really get to the other side.”

Another $320 million would go to nonprofit financial institutions, including many represented in the coalition, to subsidize lending and investment in small businesses that need capital. And the coalition would like to see $230 million to back bank and credit union loans to small businesses that might otherwise be deemed too risky.

The advocacy group is also proposing $100 million in direct equity investments in companies, with half potentially set aside for entrepreneurs of color. Another $50 million would be devoted to small-business technical assistance, such as accounting or legal help.

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Then there would be a new $100 million real estate finance program to help small businesses buy the buildings they occupy. State officials and small-business advocates are increasingly hearing from small-business owners who would like to purchase their properties, to provide more stability for their future. The properties could then also serve as collateral for loans that would otherwise be unavailable.

“We are paying our landlords so we have very little money to invest in our businesses and our employees,” Idowu said. “If we own our land, the money stays with the business.”

Lawmakers hope to allocate at least some of this money before they wrap up formal sessions for the year at the end of November. A joint House-Senate budget committee will hold its last hearing on the issue on Tuesday.

State Senator Eric Lesser, co-chair of the economic development committee and member of the budget committee hosting the ARPA hearings, said he hopes to use the ARPA allocation to address the business equity coalition’s goals.

“The money was granted by the federal government with the intention of trying to repair some of the most significant damage from COVID,” Lesser said. “It’s undeniable that the impact was most severely felt in communities of color and ‘Gateway cities’ and communities that were already facing significant headwinds.”


Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.