Civil rights leaders demand ‘explicit’ federal funding for black businesses hit hard by pandemic
“It should be specific,” said Ron Busby, president and CEO of US Black Chambers. “He shouldn’t be a minority, he shouldn’t be underserved, he should be black.”
Black leaders say the disparity exacerbates the historic challenges black entrepreneurs already face – including systemic racism in obtaining bank loans and accessing capital for their businesses. Black businesses have also closed at higher rates due to lower cash positions. They are also more likely to be in Covid-19 hotspots and have seen significant coverage gaps in PPP funding given that loans only reached 20% of eligible businesses in states with the largest number of black companies, according to the New York Federal Reserve.
Harris and Yellen both acknowledged that little P3 funding went to black companies under the administration of former President Donald Trump. Biden’s stimulus package, Yellen said, would allocate $ 15 billion in “evenly distributed subsidies” to more than a million of the hardest-hit small businesses, she said.
“This pandemic has exacerbated all the problems that existed before,” Yellen said.
During the meeting, black executives repeatedly asked Harris and Yellen if the stimulus package would include exclusive funding for black businesses. Harris said the plan would benefit black Americans while also including targeted aid for all businesses run by minorities and women.
Marc Morial, president of the National Urban League, said the Biden administration’s package is an improvement on what Trump has proposed. However, Morial said he was concerned that black companies would still be overlooked without specific provisions for them.
“We would like to see explicit targeting,” he said. The idea is that black businesses came into the pandemic with a small cap and already faced a series of challenges. Many have had to shut down due to lack of business, savings, reserve funds and access to financing. ”
Busby said most black businesses were not eligible for PPP loans, as the aid was largely intended for businesses with a large staff or salary budget. About 99% of black-owned businesses are run by sole entrepreneurs, Busby said.
“I think it should be related to micro businesses,” he said of Biden’s Covid-19 relief program. “Those particular companies that have 10 or fewer employees.”
Busby said the Biden administration should also consider funding black Americans who lost their businesses last year and want to reopen them or have lost their jobs and want to start a startup.
‘Every little bit counts’
Many black entrepreneurs say federal funding from the Biden administration would help them keep their businesses open.
Bobby Ford, owner of BGF Bobby Q’s restaurant in Freeport, NY, said keeping his restaurant afloat during the pandemic had not been easy.
Last year, Bobby Q’s downsized to just a take-out restaurant, losing all restaurant customer sales as well as catering because people no longer gathered.
At first, he couldn’t get a bank loan and had to use his personal funds to support the business and pay his employees. In July, Ford received a PPP loan that kept the company open. Yet Ford says additional federal funding would provide more job security for its seven employees.
“Every little bit counts,” said Ford. “My workers, they still have bills to pay, so yes, this help helps a lot.”
Falling profits weigh on Chicago business owners
Steve Fulton, who runs a shoe-shining business at Chicago’s city hall, said he lost so much business during the pandemic that he couldn’t pay his rent and depended on pantries for his meals.
Fulton said he’s gone from an average of 50 clients a day, earning as much as $ 200, to no clients at all on some days. He was unable to obtain grants to support his business. Fulton said he was begging the Biden administration to take the pressure off black businesses.
“I see a lot of big companies getting PPP bank loans when we’re ignored,” Fulton said. “The need for black-owned small businesses to receive help is overwhelming.”
Ramona Pouncy struggles to keep the doors open to an ice rink that once served hundreds of young people in Chicago.
Pouncy, owner of The Rink, said the pandemic has forced her to limit capacity and hours of operation. The changes have taken a devastating blow to his income.
Pouncy got a small business loan and grant last year, but it was just enough to pay his 14 employees and catch up on utilities.
“It was tough,” Pouncy said. “I mean if you go from 400 people in one building to nothing. And we still have 35,000 square feet of facilities that we need to maintain.”
There are still bills to pay and she wants to make sure that her employees can still be paid. said Pouncy.
Atlanta restaurant forced to close
Some black businesses were unable to maintain Covid-19 restrictions, including social distancing measures, and shut down in the months following the pandemic that hit the country.
Simon Guobadia closed his popular Atlanta restaurant, Simon’s, last May.
Simon’s offered take-out under CDC guidelines for a few months, but it didn’t bring in the same revenue as the restaurant operation. Guobadia said his restaurant was 7,000 square feet and it would not have been profitable to operate with limited capacity.
“It wasn’t enough to maintain a business model like the one we started doing,” Guobadia said. “And we were going to suffer in the long run.”
CNN’s Chauncey Alcorn contributed to this report.