Civil rights leaders demand ‘specific’ federal funding for Black companies hit exhausting by pandemic

“It should be specific,” said Ron Busby, President and CEO of US Black Chambers. “It shouldn’t be a minority, it shouldn’t be undersupplied, it should be black.”

Their filings come when black-owned companies closed at disproportionate rates last year after business owners said they were turned down by banks on credit and overlooked in the first two rounds of Paycheck Protection Program (PPP) funding. According to the New York Federal Reserve, the number of black companies fell 41% between February and April 2020. White companies were only down 17%. Overall, small businesses saw a 22% decrease.

Black leaders say inequality exacerbates the historical challenges black entrepreneurs already face – including systemic racism in securing bank credit and access to capital for their businesses. Black companies have also closed at higher rates due to weaker cash positions. They’re also more likely to be in the Covid-19 hotspots, and there have been significant shortfalls in PPP funding, as loans are only 20% of eligible businesses in states with the highest numbers of blacks, according to the New York Federal Reserve Company achieved.

Recently, black chamber leaders, including Busby, took part in a virtual round table with Vice President Kamala Harris and Treasury Secretary Janet Yellen to discuss how the government wanted to help black businesses devastated by Covid-19.

Harris and Yellen both acknowledged that little black PPP funds went to PPP under the administration of former President Donald Trump. Biden’s recovery plan, Yellen said, would allocate $ 15 billion in “fair grants” to more than 1 million of the hardest hit small businesses, she said.

“This pandemic has exacerbated all pre-existing problems,” Yellen said.

During the meeting, black leaders repeatedly asked Harris and Yellen whether the stimulus package would include exclusive funding for black companies. Harris stressed that the plan would benefit black Americans while providing targeted assistance to all minority and women-run businesses.

Marc Morial, president of the National Urban League, said the Biden administration’s package was an improvement on what Trump had offered. However, Morial said he was concerned that black companies could still be neglected without specific regulations.

“We would like an explicit alignment,” he said. “The idea is that black companies came to the pandemic that was thinly capitalized and already faced a number of challenges. Many had to close because they had no business, no savings, no reserve funds and no access to finance.”

Busby said most black companies did not qualify for the PPP loans because the aid was largely targeted at companies with large staffing or salary budgets. About 99% of black-owned businesses are sole proprietorship, Busby said.

“I think they should be micro-businesses,” he said of Biden’s Covid-19 aid package. “These companies specifically have 10 or fewer employees.”

Busby said the Biden administration should also consider funding black Americans who lost their business last year and want to reopen or lose their jobs and start a start-up.

“Every little bit helps”

Many black business owners say that federal funding from the Biden administration would help them keep their businesses open.

Bobby Ford, who owns BGF Bobby Q’s restaurant in Freeport, NY, said keeping his restaurant afloat during the pandemic has not been easy.

Last year, Bobby Q was downsized to a takeout restaurant that lost all dine-in sales as well as catering because people stopped gathering.

He couldn’t get a bank loan at first and had to use his personal funds to keep the business going and pay his employees. In July, Ford received a PPP loan that helped keep the business open. Ford said additional federal funding would provide more job security for its seven employees.

“Every little bit helps,” said Ford. “My workers, they still have bills to pay, so yes, this help helps a lot.”

The dwindling profits weigh on Chicago business owners

Steve Fulton, who runs a shoe store at Chicago City Hall, said he lost so much business during the pandemic that he couldn’t pay his rent and rely on pantries for his meals.

Fulton said he stopped going to customers at all on a few days from an average of 50 customers a day making up to $ 200. He couldn’t get any grants to keep his business going. Fulton said he was advocating that the Biden administration should give black companies some relief.

“I see a lot of big companies getting the PPP bank loans while we’re being overlooked,” said Fulton. “The need for help for black-owned small businesses is overwhelming.”

Ramona Pouncy is fighting to keep the doors open to an ice rink that once served hundreds of Chicago teenagers.

Pouncy, owner of The Rink, said the pandemic had forced them to limit capacity and hours of operation. The changes have resulted in a devastating blow to their revenue.

Pouncy secured a small business loan and grant last year, but it was only enough to pay her 14 employees and the utilities to catch up.

“It was tough,” said Pouncy. “I mean, if you go anywhere for 400 people in a building. And we still have 35,000 square feet of facility that we need to maintain.”

There are still bills to be paid and she wants to make sure that her employees can still get paid. Said Pouncy.

Atlanta restaurant forced to close

Some black companies were unable to maintain Covid-19 restrictions, including social distancing measures, and closed within months of the pandemic.

Simon Guobadia closed his popular Simon restaurant in Atlanta last May.

Simon offered take-away meals for a few months in accordance with CDC guidelines, but didn’t bring in the same income as the dine-in. Guobadia said his restaurant was 7,000 square feet and it would not have been profitable to work with limited capacity.

“It wasn’t enough to keep a business model going like we originally started,” said Guobadia. “And we would suffer in the long run.”

CNN’s Chauncey Alcorn contributed to this report.