Black Businesses in Peril

Grove Hall restaurants, barber shops, hair and nail salons were still doing business last week. BANNER PHOTO

In the Midst of the Coronavirus Pandemic, Many Business Owners are Fearing for Their Future.

By Kenneal Patterson

In the midst of the coronavirus pandemic, many business owners are fearing for their future. These worries are especially pronounced in the state’s black neighborhoods. A survey conducted by the Black Economic Council of Massachusetts (BECMA) found that 90% of respondents are currently experiencing a somewhat to severe negative financial impact due to the crisis.

The survey, published last Thursday, highlighted the often-debilitating effects that the outbreak has had on black-owned businesses.



“Black businesses were already in a precarious position prior to the start of the COVID-19 pandemic,” the report states. “The current crisis has devastated an already hampered business community.” The report notes that without protection efforts, many businesses will suffer long-term consequences.

“The black business community is in dire straits right now,” BECMA Director Segun Idowu told the Banner.

Idowu added that many black businesses lacked stable investments from the city or state. Now, he said, many businesses won’t last 90 days.

The report surveyed 71 business owners, said Idowu, more than a quarter of BECMA’s membership. Sixty-eight percent of respondents said that there would be a significant or severe financial impact on their businesses, with a majority saying that their businesses wouldn’t last more than six months and 47.4% predicting that their businesses would not survive longer than three months. Thirteen percent of respondents noted that their businesses wouldn’t survive at all.

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Idowu noted that many businesses have already had to lay off workers. The report notes that 43% of members with full and part-time employees are considering staff reductions to cope with an unprecedented situation.

The Small Business Administration (SBA) has committed emergency capital to businesses across the commonwealth through the Economic Injury Disaster Loan program. These loans can offer up to $2 million in assistance. The Massachusetts Growth Capital Corporation is also making $10 million available. Many businesses, however, cannot afford to take out loans.

“I’m happy that these [loans] exist,” said Idowu. “But they are really only going to help businesses who already have the ability to take on more debt, to take out these loans, who already have the reserves to pay back the interest.” 

Even before the outbreak, many businesses could not take out loans, said Idowu.

“Even some of the best businesses in our communities aren’t financially capable of taking on more debt,” he added.

“The vast majority of our businesses need grant-based type of investment,” said Idowu. “They need money now.” Not only are the owners in need of funds, said Idowu, but their many employees are in need as well.

Black-owned businesses are primarily suffering due to social distancing and “stay-at-home” measures implemented throughout the state, aimed at preventing the spread of infection. Small shops are facing a decrease in foot traffic — many Massachusetts residents refuse to go outside due to government bans, lack of transportation or fear. Most upcoming events are canceled for the foreseeable future. The report also notes the impact of federal air restrictions, which have disrupted supply chains.

To lessen the burden, Idowu said that he’s calling for a moratorium, or freeze, on commercial rents and oncoming bills. He also noted the needs of independent contractors, like consultants, who often work alone.

“They contribute to the economy as well,” he said. “So we also have to make sure that we’re protecting these business owners.”

At the end of the day, Idowu said, it all boils down to the type of financial investment being made.

“I know everyone’s concerned about everything overall, because there’s chaos happening,” said Idowu. “But if we aren’t intentional about our efforts to protect black and brown businesses in the state, we could see whole economies obliterated by the end of this.”

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