Frank Dogbe, owner of SOS Building Services in Minneapolis, decided not to cut jobs or the pay of his workers when the offices they cleaned started clearing out two months ago.

The revenue of cleaning company quickly fell by about one-third. Dogbe dug into his 401(k) plan for $20,000 to meet payroll for his 20-plus workers, who get a minimum of $15 an hour.

But he also anticipated the company would be likely to qualify for the Small Business Administration’s Paycheck Protection Program, created by Congress in late March to help firms hurt by the coronavirus and instant recession.

Dogbe applied for the loan through his bank, U.S. Bank, but he became one of thousands of small business owners who didn’t get a loan when the first round of $349 billion quickly ran out in just 13 days.

Critics pointed out the loophole-riddled SBA rules allowed some big companies to get funds while smaller ones were left on the sidelines.

Congress and the SBA responded with a second round, with $310 billion available, and new groups of lenders, including small business counselors and Community Development Financial Institutions, or CDFIs.

At the suggestion of a former business counselor for SOS at St. Paul’s Neighborhood Development Center (NDC), Dogbe made a second application that was funded for the full $130,000 in the same day. Enough to cover employees for eight weeks.

“Only one filed for unemployment,” Dogbe said. “I told him, ‘You have a job. I’m paying you. Be proud. That unemployment money is temporary. We have to be ready for business to return.’ ”

Dogbe and other minority owners are proxies for the businesses that got funded in the second round.

Dogbe, 46, started Minneapolis-based SOS in 2005 after immigrating from Togo in 1999. He first worked as a night building cleaner while earning a college business degree during the day.

Bruce Corrie, an economist at Concordia University in St. Paul who studies immigration and minority business, said the second round worked in part because of the likes of the Metropolitan Economic Development Association (MEDA) in Minneapolis, the NDC in St. Paul and African Economic Development Solutions and the Community Reinvestment Fund.

“Then the magic started to happen for these minority and immigrant entrepreneurs,” Corrie said. “These businesses are along commercial corridors in the Twin Cities that minority and immigrant businesses helped revive. One afternoon of access had the power to break down tons of frustration and instill new hope and energy.

“Congress was wise to include CDFIs as a conduit. It takes a lot of sweat equity to work with small businesses with varying levels of sophistication, who do not have all the paperwork ready and documentation needed.”

Rolando Borja, founder and chief executive of Integrated Staffing Solutions, which recruits and places immigrants in permanent jobs in rural Minnesota, had a similar situation as Dogbe in the first round. He applied through two different banks, using automated processes, only to be told that he was too late.

He worked with MEDA and secured a nearly $250,000 loan that enabled him to keep 10 of his 14 employees on board.

“The loan gives me oxygen to keep breathing and pay my employees,” Borja said. “I don’t need $10 million but I could use another $250,000. I have offices in Minneapolis and Puerto Rico and I house individuals in four communities. Most placements are for manufacturing with good companies such as Ashley Furniture, Winnebago and Viacom. I think they will be OK, and I hope to re-establish our business by July. I’m confident this economy will rebound.”

U.S. Bank said that, in Minnesota as of last week, it had made 6,100 PPP loans for more than $570 million, an average loan size of around $93,000. The Minneapolis-based bank in late April also provided $50 million in low-interest, multiyear capital to CDFIs, including MEDA and the Community Reinvestment Fund, enabling them to make more loans to clients.

“We’re proud to have been able to help 6,100 Minnesota small businesses and more than 81,000 small businesses nationally secure PPP loans,” U.S. Bank said in a statement. “These businesses, on average, are small, having only about 10 employees and the average loan was for less than $100,000.”

Wells Fargo, another of the largest banks in Minnesota, declined to share statistics for its PPP-related lending in the state. The San Francisco-based company has invested capital of $7.5 million in recent years in local CDFIs.

The SBA reports that the average loan size during the first round of PPP was $218,000 and in the second round was $70,000. The loans will be forgiven if businesses spend at least 75% of the proceeds on payroll within eight weeks of getting the money. The averages declined as some larger companies, under public pressure and with other sources of capital, returned their seven-figure loans. Some smaller firms that were ordered closed to prevent spread of the coronavirus also returned the loans over worries about repaying them.

Alfredo Martel, chief executive of MEDA, said many small businesses weren’t ready to compete for PPP funds in the first round.

“Big banks had the technical and human capacity for speed and that money went out in a flash … to the well-oiled locomotives,” he said. “It created disparities that CDFIs work through … language barriers and documentation. We figured out the problems. The rules are now clearer. And CDFIs got a chance.”


Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at