Editor's Note: This story has been updated to include a response from the city provided after the story was published.
Kevin La owns Jasmine Beauty School, located near the Rolando neighborhood in San Diego's District 4. For more than two years, he has trained hairdressers, estheticians and nail techs.
When the pandemic forced his business to shut down last March, he applied for and received both a Paycheck Protection Program loan and $10,000 from the city of San Diego's Small Business Relief Fund.
“We used it for overhead expenses, such as payroll, rent and electricity,” La told NBC 7.
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Without that money, La said, “there is a good chance we had to close down permanently.”
The Small Business Relief Fund distributed grants and microloans ranging from $1,000 to $20,000.
To be eligible for the Small Business Relief Fund, businesses must be located within San Diego, have a valid San Diego business tax certificate, fewer than 100 employees, been operational for at least six months and must prove economic hardship due to the coronavirus outbreak.
An NBC 7 Investigates analysis showed that nearly $17 million was given out to local businesses through the program, but compared to other areas in San Diego, businesses in District 4 -- which includes Encanto, Skyline and Lincoln Park -- received much less money, only $309,000. That’s compared to District 3, which includes downtown, Hillcrest and South Park, where businesses received nearly $5 million, and District 2, which includes Clairemont, Pacific Beach, and Point Loma, and received a little more than $3 million.
District 4 Councilmember Monica Montgomery Steppe's office said District 4 only represents 4% of total businesses in San Diego, a reason it was not awarded as much money.
NBC 7's analysis found 189 District 4 businesses submitted applications. Fifty of those were approved -- a rate of about 26%, which is in line with many other districts.
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Some business owners didn't even apply for the program.
"Initial feedback from the small businesses in our communities of concern was that the Small Business Relief application was too onerous," Montgomery Steppe told NBC 7. "In response to their feedback, my office led the charge to establish the Strategic Alliance of Ethnic Chambers to aid disadvantaged businesses with technical assistance."
And it's not just District 4 -- last July, many minority-owned businesses from across the city told NBC 7 Investigates they felt the program was not operating on a level playing field.
The business owners said certain criteria, such as bad credit or a criminal record, indirectly prevented them from qualifying for the financial aid.
But even those who say they met all the conditions were denied. Malaysia Yancey, is the owner of San Diego bakery GYSL. She started baking specialty cakes and cupcakes professionally in 2017. She said she applied for and was denied money from the San Diego Small Business Relief Fund.
“I got a woman from the office on the phone and she said I didn't get approved for the grant or the loan. She didn't give any description of why I didn't get approved,” said Yancey. She thought she had filled out something on the application incorrectly.
“I was thinking it was just myself, not knowing there were other people not getting it as well,” she said.
After our story aired, the city said it could not find a record of Yancey's application. Yancey says she received something in the mail after applying but no longer has it.
Yancey says she had no choice but to put her baking business on hold and get another job to pay the bills. But she still has dreams of running her own bakery again.
“I’m over anyone coming and just handing me anything,” she said. “If I want something I am going to go out there and get it myself.”
The city of San Diego originally allocated $20 million for the Business Relief Fund. A spokesperson said about $3 million of that amount was used to house the homeless population at the San Diego Convention Center during the height of COVID-19.
