[Black Business\COVID-19]]
CNBC: “Black small business owners have endured an especially tumultuous few months. They have been hit harder by the coronavirus pandemic, they have received less federal support…”
Photo: YouTube
Black small business owners — and small business owners of color in general — are particularly pessimistic about their enterprises surviving the coronavirus economy.
That likely means continued divergence in small business fortunes along racial and ethnic lines.
Just last week, the Federal Reserve Bank of New York released a study highlighting the deep toll Covid-19 has had on Black-owned small businesses, with 41% shutting down between February and April. The shuttering proportions were also elevated among Hispanic (32%) and Asian-owned small businesses (26%) relative to White-owned small businesses (17%).
The latest CNBC|SurveyMonkey Small Business Survey echoes this divergence: Barely more than half of small business owners who are Black, Hispanic, Asian, or another race say their business can last for more than a year under current conditions, compared with nearly two-thirds of Whites who say the same.
The Q3 CNBC|SurveyMonkey poll was conducted among more than 2,000 small business owners across the country from July 20-27, and it is the latest in a quarterly series of surveys conducted among small business owners dating back to 2017. While the analysis from the New York Fed had a time horizon of February to April of this year, this new poll provides a more updated snapshot of small business sentiment.
Racism and the small business landscape
Since the killing of George Floyd in late May, Americans have been grappling with a renewed realization that racism persists in this country in 2020. Black small business owners deal with the same overt racism that all Black people face, but they encounter additional, more specific and sometimes more insidious facets of discrimination in the business world.
Black small business owners have endured an especially tumultuous few months. They have been hit harder by the coronavirus pandemic, they have received less federal support, and their recovery from the second to third quarter of this year has been less successful when compared with White small business owners in particular.
In our second quarter survey this past April, Black small business owners were less likely than small business owners of any other race to have applied for either an economic injury disaster loan from the Small Business Administration or a loan as part of the Paycheck Protection Program (PPP). The analysis from the New York Fed points to the fact that Black-owned small businesses tend to be concentrated geographically in parts of the country that have faced the most direct impact from the coronavirus, and yet small businesses located in those areas have not received a disproportionate share of the federal small business relief.
Claire Kramer Mills, assistant vice president at the New York Fed, attributes the problem to a disparity in the small business world that typically goes unacknowledged: the fact that small business owners of color have weaker ties with the financial industry as a whole, and therefore have fewer opportunities afforded to them in good times and bad times alike.
“The racial disparities in bank relationships prior to Covid-19 detailed here raise structural questions about the presence and functioning of banks in communities of color, questions that have heightened significance when banks are relied on to administer federal, taxpayer-supported relief programs” she stated in the Fed analysis.
Banks are more likely to extend a line of credit or prioritize processing a loan for clients with whom they have long-standing relationships; those clients are most often White. Yet, relative to other small business owners, Black small business owners are overrepresented in the exact industries — such as retail, food services, and health care — that rely on in-person interactions and that have been the most disrupted by the coronavirus pandemic.
Read the rest of this CNBC story here: https://www.cnbc.com/2020/08/11/what-hasnt-changed-for-black-small-business-owners-since-george-floyd.html
