A small-business poll paints a very grim outlook for Black-owned businesses, estimating that 60% will close by April 2021 without federal relief.
The poll, conducted by the Main Street Alliance and Color of Change, asked 600 entrepreneurs from different backgrounds how long they believe they can stay open in the current coronavirus economy without federal help.
Just 40% of Black respondents say they can make it past the next six months. Forty-six percent of Asian respondents, 48% of Latinx and 55% of white respondents said they can make it past the next six months.
The two groups say the demise of Black-owned businesses would be devastating for Black communities and the recovery could take decades.
“The devastating consequences of these closures will ripple throughout Black communities and last for generations,” Color of Change President Rashad Robinson said, according to CBS News. “Our federal government can no longer wait to bring immediate, accessible relief to Black small businesses.”
Amanda Ballantyne, Main Street Alliance’s executive director said it’s imperative for Congress to pass the HEROES Act and the legislation should include subsidies to small businesses, eviction protection, and expanded unemployment insurance.
Ballantyne added Black-owned businesses are in more danger of closing than businesses owned by other races because they were denied funding from the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan.
When the PPP first opened for small businesses to receive funds to make it through the pandemic, public compaines pillaged the program. Shake Shack, Ruth’s Chris Steakhouse, and even the Los Angeles Lakers all took money from the PPP program and were shamed into giving it back, but other public companies kept the money.
Of the Black-owned businesses that received federal funds, many received less money than they applied for, according to Ballantyne.
Others were denied a loan and were given no explanation as to why. Terrika Walker, who owns a residential care facility in Louisiana told CBS she was denied a PPP loan and wasn’t given an explanation until six weeks later.
According to Walker, the bank that accepted her PPP application in May, fired the employee who was looking over her material and her application wasn’t reviewd unti June, but by then the PPP funds were depleted and Walker was forced to lay off five employees.
Research from the University of California at Santa Cruz shows there were more than 1 million Black-owned businesses in the U.S. at the beginning of February. By mid-April, 440,000 Black business owners closed for good, a 41% plunge.