Black businesses hit hard by coronavirus
Some wonder how they will withstand another wave of economic uncertainty following decades of inequity.
Stephanie Byrd agonized over temporarily laying off nearly the entire staff at her family’s trio of Detroit businesses when the coronavirus pandemic hit.
But she’s not just concerned about the impact on their bottom line.
She’s worried other blackowned businesses will struggle to withstand another wave of economic uncertainty, following decades of inequity that made it hard for many to flourish in the first place.
“Most of the people I know who have businesses and are black are terrified right now,” said Byrd, whose family owns Flood’s Bar & Grille, The Block restaurant and the city’s Garden Theater. “There could be a new wave of black businesses that are able to reinvent themselves post-pandemic, but black businesses could also be wiped out for the most part within a black city. What would it look like without black-owned businesses?”
COVID-19 has disproportionately impacted black Americans, infecting and killing them at higher rates across the nation.
They also worry the pandemic could widen the existing black wealth gap. According to the Federal Reserve’s 2016 Survey of Consumer Finance, the median white family net worth of $171,000 is about 10 times greater than that of a black family’s, which is $17,150.
Black businesses historically have struggled to gain access to financing due to discriminatory lending practices and a lack of relationships with big banks. But civil rights leaders and historians say their struggles are also rooted in the simmering effects of racism and Jim Crow-era laws that enforced racial segregation and denied black people equal opportunities.
“Structural racism has created an environment where black businesses are starved for capital,” said Marc Morial, president and CEO of the National Urban League, a civil rights and urban advocacy organization.
Juliet Walker, founder of University of Texas at Austin’s Center of Black Business, History, Entrepreneurship and Technology, said black enterprises existed even prior to the Civil War. They especially thrived during a “golden age” from 1900 to 1930 in areas such as Tulsa, Oklahoma’s Greenwood District, known as Black Wall Street. But those moments were short-lived.
On Thursday, the SBA announced it was setting aside $10 billion exclusively for Community Development Financial Institutions, which work to expand economic opportunity in minority and other under-served communities.
Bernard Kanjoma and his fiancée Jessika-Katherine Naranjo Colina, who co-own the Michigan-based graphic design and marketing firm Naranjo Designs, said they received an $8,000 loan May 5.
Kanjoma, who emigrated to the United States from Malawi, said their 12-person team has seen an 80% drop in business but they’re identifying creative ways to weather the crisis.
“We have been heavily impacted and it’s been challenging but I felt like all the hardships that I went through with immigration and everything else to be where I am now, this is something that is just going to blow over,” Kanjoma said.