Oakland group keeps focus on Blackowned businesses
Even amid a nationwide reckoning about racism, minorityowned businesses are experiencing disproportionate impacts from the coronavirus pandemic.
This is especially true for Blackowned businesses, which had unequal access to recovery funding and are more likely to shut their doors than other businesses. Since early February, 41% of Blackowned businesses have permanently closed, compared with 17% of whiteowned businesses, according to research from UC Santa Cruz.
“It’s just an exacerbation of what we’ve already been seeing and what’s already been in place. It’s just highlighted right now,” Shomari Carter, executive director of Oakland Citizens Committee for Urban Renewal, said at a virtual conference Wednesday that focused on the problem. “It’s an issue of access. We saw this with the Paycheck Protection Program. We had no one to call. There was no way to process your application.”
Black entrepreneurs have been more than twice as likely to have a bank loan denied than their white counterparts,
according to the Brookings Institution, a public policy nonprofit. If approved, Black entrepreneurs often get less favorable terms. And only half of Blackowned businesses pulled through the 200809 recession, compared with more than 60% of whiteowned companies, the Brookings Institution found.
Management consulting firm McKinsey & Co. estimated that 39% of jobs held by Black workers (about 7 million) have been vulnerable to layoffs, furloughs or pay reductions during the pandemic. The same report said 40% of revenue generated by Blackowned businesses is in the hardesthit sectors, like hospitality, retail and transportation.
In an effort to offset the inequities, the Oakland urban renewal group, founded in 1954, has started a Black Business Relief Fund that offers minigrants.
The group is also trying to build trust and support in the community with food distribution programs and rallies.
People are rallying to the cause. In the immediate aftermath of the police killing of George Floyd, lists of Blackowned businesses circulated on social media.
Yelp made it easier to find Blackowned establishments, and Uber Eats waived delivery fees from Blackowned restaurants.
According to Google, searches for “Blackowned businesses near me” reached an alltime high last month. But there is some question as to whether the fervor will continue.
“That’s a deeper question,” Carter said. “Really, that’s a question of changing community behavior and making sure that we’re uplifting Black businesses and making sure the community sees the value in other Black businesses.”
It’s probably a question of breaking barriers of funding, too.
The Oakland group is trying to establish Blackowned financial institutions and boost relationships with nonprofit community lenders.
Some banks are organizing along the same lines. On Thursday, Wells Fargo announced details of an approximately $400 million effort to help small businesses.
Part of the program will allocate grants — initially $28 million — to community lenders that serve Blackowned businesses.
“We made a very conscious decision to focus on ethnically and racially diverse entrepreneurs, particularly Black and AfricanAmerican and Latinx entrepreneurs, because the data shows that these are the hardesthit segments,” said Jenny Flores, head of Wells Fargo’s small business growth philanthropy who is leading the program, known as the “Open for Business Fund.”
“Black businesses have faced the largest shutdown of any diverse group in the country,” Ron Busby Sr., CEO of U.S. Black Chambers, said in a statement published by Wells Fargo. “We need to accelerate an economic agenda that helps them recover. The funding that Wells Fargo is putting back into Black businesses and other minorityowned small businesses across the country is truly going to be appreciated and will give the kick start entrepreneurs need to continue and grow. ”