Photo Credit: Unsplash | Christina Wocintechchat
Challenges Black-Owned Businesses Are Having During Coronavirus Crisis
It’s no secret that Black-owned businesses have historically faced disproportionate barriers to funding for their businesses.
Despite the fact that between 2007 and 2017, minority-owned small businesses grew by 79%, data has shown that minority-owned businesses have a harder time getting approved for small business loans than their white counterparts. Once they are approved, Black-owned firms are more likely to receive lower amounts and higher interest rates, as reported in Forbes.
The impact of this is slower growth and less hiring. Black business owners are often forced to use more of their own cash to run their business, which means it can be tough to invest in the future and prepare for a rainy day.
And this struggle was before the devastating economic effects of the coronavirus crisis.
Across the country, a number of small businesses have been hurt by this global pandemic.
As the federal government works to deliver a stimulus package that would help small businesses – there are growing fears that Black-owned businesses will feel the brunt of the economic impact as a result of COVID-19.
“There’s this old saying, ‘When America catches a cold, black America catches pneumonia,’” Ron Busby, president, and CEO of the U.S. Black Chambers Inc. told HuffPost in an interview.
Black-owned companies are turning to their consumers and asking for help. Marc Lamont Hill announced that he started a GoFundMe to continue supporting staff at Uncle Bobbie’s Coffee & Books in Philadelphia after temporarily closing the shop due to the coronavirus.
The Coronavirus has forced us to temporarily close @UncleBobbies. We’ve started a GoFundMe to raise funds for supporting our staff and paying bills. Please support by going here: https://t.co/USIHufdQbY— Marc Lamont Hill (@marclamonthill) March 22, 2020
Marcus Samuelsson, the owner and head chef of at Red Rooster restaurant in Harlem said that he believes that the impact would be “worse than after 9/11” adding that the restaurant industry should be considered in the federal stimulus package.
Black business owners are trying to cope but unfortunately, due to the disproportioned means of funding, the future of these beloved businesses remains uncertain.
How To Support Black-Owned Businesses During The Coronavirus Pandemic
The Coronavirus relief package, otherwise known as the Cares Act, has allocated $350 billion to the Small Business Administration to issue loans of up to $10 million per business. The Cares Act also provides $10 billion for emergency grants of up to $10,000 for small businesses to cover operating expenses.
Out of the $2.2 trillion coronavirus relief bill, Congress only allocated $10 million to the Minority Business Development Agency, which connects “minority-owned businesses with the capital, contracts, and markets they need to grow.
That number doesn’t even add up to be 1% of coronavirus relief assistance as explained by CityLab, which means that Black-owned businesses need our support more than ever.
The Strivers Row project has a list of Black-owned businesses in New York City, which has been described as the epicenter for the coronavirus in the U.S., that people can support, according to News One.