These neighborhood lenders got Philly coronavirus loans approved, plan new credit union

It’s a Philadelphia story as old as Ben Franklin — with a coronavirus twist.

When he came to Philadelphia 20 years ago, Diego Vivas went door to door, passing out pizza shop ad flyers to earn his bread.

In 2012, he borrowed $80,000 for printing equipment to make the pizza flyers himself. By last winter, Vivas says, one of his companies, D.A.S. Inc., in Juniata Park, was printing handouts “for most of the pizzerias in Philadelphia.” A sister firm, Penta Ink Inc., designed the fliers. And his bilingual app, BitesCourt, helps customers summon delivery from their smartphones.

But last month, Vivas had to lay off most of his staff of 25 in the coronavirus shutdown.

He rushed to learn about the federal government’s new Paycheck Protection Program — “forgivable” loans if the money is used to pay for payroll and space over the next two months.

Vivas called the bank that holds his checking accounts, Tompkins VIST, and piled up the PPP paperwork — “all my information and five years of taxes.” Days went by, then a week. He was told to reapply online. Frustrated, “I called four other banks,” but they would only lend to current customers.

Finally, a nonprofit serving Latino immigrant communities and other businesses, Finanta, which had financed a piece of his equipment loan eight years ago, took his application — and approved a PPP loan of more than $100,000. “Now I can start bringing back people,” Vivas told me.

Working in communities where many small-business owners worry about gettingbankers’ attention, Finanta and a similar, Lancaster-based lender, Community First Fund, have made $15 million in PPP loans to a total of 172 firms since April 6, in mostly Latino and African American communities across Philadelphia and Southeastern Pennsylvania. They approved 80% of the 212 firms that applied.

Local banks such as Parke and Republic report similar approval ratios. By contrast, the nation’s biggest banks such as Bank of America, JPMorgan, and Wells Fargo each reported approving fewer than 10% of their PPP applications in the first round of the program. They hope for more in the second round, which began Monday.

Four months ago, after 10 years in business, Silvia Paulino moved Silvia Bakery to larger quarters at 2530 N. Second St., in the Bloque de Oro Latino business district, where she could employ 12 people making sweet Dominican cakes, pastries, and flan quisqueya with vanilla and cheese.

“My workers are from all over — like the United Nations," she told me in Spanish. But the shutdowns forced her to close the store, leaving her scrambling to fill orders from groceries and bodegas that stayed open — until a Finanta loan for $200,000 helped her start paying the crew again.

Similarly, Johaly Arias and Helfis Perez’s Jojo Academy preschools in Crescentville and Olney sent home 95 young students and 16 full-time employees when the governor shut their doors.

“I saw this loan program in the news, and I called my accountant," and he reminded her about Finanta, where she had taken a business training class and prepped for an initial $25,000 business-opening loan last year.

“We qualified for $28,000 in PPP,” and have resumed paying those staffers who were not receiving unemployment, Arias told me.

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These and other loans were a final achievement for Finanta founder and president Luis Mora, who plans to retire this spring, 24 years after opening the place.

Finanta allied with another nonprofit, Community First Loan Fund of Lancaster, which has offices in Reading, Allentown, and other cities with large Latino populations, bundling customer applications to speed PPP loans to the federal Small Business Administration, which administers the program.

And now the groups that hunted borrowers together, Finanta and Community First, plan to merge, Daniel Betancourt, president of 18-year-old Community First, told me. “We can achieve much more in the market when we join forces,” he said.

“Together we are stronger and more capable,” Mora, Finanta’s founder, said in a statement. He plans to retire June 30.

The funds have prospered with help from larger institutions, which are obligated by the federal Community Reinvestment Act to make credit available in poor and minority neighborhoods if they hope to have future mergers approved.

Wells Fargo invested $3 million with Community First in February. JPMorgan invested $14.5 million in a group of nonprofit “community development financial institutions” including Community First, Finanta, and two others when it began opening branches in the Philadelphia market in 2018.

Betancourt says his board isn’t done growing: The fund is preparing to acquire a credit union charter so his deposits will be insured.

He said the neighborhood had felt a vacuum when the 7,000 member Borinquen Federal Credit Union closed in 2011, a victim of fraud by a manager.

Vivas, a native of Colombia, said he’s pleased that Philadelphia’s vibrant immigrant business communities are finally drawing lenders’ interest. Indeed, Tompkins VIST bank called him Monday, as a second round of PPP loan approvals began.

“But I have my approval already,” he said, laughing.