Challenges to survive
Black business owners highlight obstacles to receiving government aid
As Congressional negotiations advanced toward a long-delayed coronavirusrelief package, Black business owners from across Connecticut told U.S. Sen. Richard Blumenthal that the legislation needs to provide wide-ranging aid for minority-owned firms.
New federal assistance cannot arrive soon enough, business owners said during the online forum Wednesday that was co-hosted by the Black Business Alliance and the Southern Connecticut Black Chamber of Commerce. The CARES Act that passed in March created the
$660 billion Paycheck Protection Program to support small businesses, but many in the meeting expressed frustrations about its slow and complex application process and said it needs to cover a broader range of other costs such as rent payments and utilities.
“I think we must use the lessons that we learned to improve the program so that it benefits the businesses on this call. The businesses on this call need more help than just the PPP provides,” said Fred McKinney, a professor of entrepreneurship and strategy at Quinnipiac University and a member of the state’s Minority Business Initiative Advisory Board. “The challenge is how do we get through this period, so that when the economy rebounds these businesses … are around to open their doors when the consumers come back.”
The forum followed about a dozen visits that Blumenthal has made to minorityowned firms since the start of the pandemic and a similarly focused roundtable that he held in October.
ADemocrat, Blumenthal expressed confidence that a relief bill could be hammered out within the next few days.
“I’m hopeful that certainly by the end of the week we will have an announcement … an announcement that will mean more loans and grants for small businesses, particularly the kind of businesses that are reflected on this call,” he said. “It’s taken longer than it should have and smaller than it should be. But it will be a bridge to a more robust and significant pandemic-relief package that I would anticipate from the Biden administration.”
Business owners told Blumenthal that new funds would be essential in helping them respond to the wave of new expenses during the pandemic.
“We need to be able to have the resources to protect both our staff and patients, and then if they are (CO
VID-19) symptomatic to be able to give them paid time off, even though they are part-time employees because they rely on that money,” said Kebra Smith-Bolden, owner of New Havenbased Holistic Home Care.
“It’s just really time to not just talk about it but be about and follow the legislation and policies to make this fair and equitable.”
Entrepreneurs also cited difficulties with PPP applications.
“The application for forgiveness of loans for the PPP is arduous, and there’s a lot of paperwork that needs to be done,” said Douglas Burke, Stamford franchisee for house-cleaning services provider The Cleaning Authority.
Blumenthal said that much of the PPP paperwork maze resulted from efforts by the Small Business Administration and banks that distribute the loans to ensure the loans are legitimate. “But I agree with you that they have to be simplified and streamlined. The process has to be made more accessible,” he said.
Obstacles to receiving PPP loans have highlighted the hurdles that minorityowned firms perennially face in accessing capital, a number of business owners said.
“I’ve got a growth plan that I’ve been working on for years, and my access to these (funding) circles is very limited,” said Jesus Puerto, owner of Soul de Cuba Café in New Haven. “What is it that you think can be done to motivate and incentivize the investment community to target funds toward Blackand minority-owned businesses?”
“We need to provide both carrots and sticks,” Blumenthal replied. “We need to encourage that kind of access through incentives to those institutions, but we also need to make sure there’s no discrimination and that takes enforcement. … I think we need to enforce those anti-discrimination laws.”
The number of active business owners in the U.S. plummeted by a record 3.3 million, or 22 percent, from February to April, according to a study of small businesses by economics professor Robert Fairlie of University of California, Santa Cruz.
Black-owned businesses experienced the largest contraction during that period. Their active contingent plunged 41 percent, to about 638,000.
The number of Latinx business owners fell 32 percent, followed by 26 percent for Asian-American business owners and 17 percent for white-owned businesses.
“I have been so emotionally affected by all of this — not just for my business, but just knowing that 41 percent of Black businesses closed (between February and April). That was shocking for me,” said Ava Sealey, owner of Bethel-based Ava Party Designs. “We really need to stop with this bandaid fixing issue and get the cure.”