Many Black-owned businesses reportedly struggled to fill out the paperwork for the local and federal government assistance programs as a result of the coronavirus pandemic, but leaders of chambers of commerce say their organizations possess the resources and knowledge to assist entrepreneurs.
“Since the coronavirus crisis hit, there has been a lot of interest in our programs,” said David Harrington, president and CEO of the Prince George’s County Chamber of Commerce. “We have an active relationship with the Small Business Administration. We provide one-to-one counseling with businesses. We also help businesses through our Capital Accelerator Program that provides coaching, counseling and access capital initiatives that help businesses.”
Since the coronavirus came onto the American scene largely in March, there have been widespread shutdowns of businesses and layoffs of employees due to stay-at-home orders issued by governors and mayors. As a result, many Black businesses have had to shutter their operations in compliance with those orders and Ron Busby, president and CEO of the U.S. Black Chambers Inc., said those African American firms are hurting.
The SBA’s Paycheck Protection Program (PPP), designed to provide financial assistance for small businesses to help pay their employees during the various states of emergencies instituted around the country as a result of the virus, promised to be a source for Black businesses but Busby said that has not been the case.
“The first rollout of the PPP left out the majority of Black firms,” he said. “We are in the process of finishing a survey on this but our preliminary findings show that less than 0.02 percent of Black businesses got PPP money. Our research shows the reason for this is Black businesses don’t have a strong relationship with a bank. The PPP funds were processed through banks.”
Busby said many Black businesses have a debit or a credit card with their bank and don’t have instruments such as a line of credit or a relationship with a lending officer that could help them access capital.
Busby also mentioned that the PPP tended to favor employee-heavy businesses, noting that of the 2.6 million Black firms in the U.S., only 144,000 have more than one employee. Nevertheless, Busby said his organization provides advocacy and information for its members and the general public.
“When issues dealing with Black businesses are concerned, we are at the table to bring inclusion into the conversation,” he said. “We talk to members of Congress about helping Black businesses and we say when you help Black businesses, you help America.”
Busby said his organization’s role has become critical since the pandemic started and said somberly that 35-40 percent of Black businesses may have to shutter because they don’t have the resources to continue.
“The problem Black businesses have is access to capital,” he said. “The average Black business only has $400 in emergency funds. That’s not enough to make it now when the average Black business generates $75,000-$80,000 a year. In order to survive, Black businesses must consider options as joint ventures or mergers or simply being bought out. We are in a different era now and we have to look at different ways to survive.”
Busby said his organization offers webinars on such topics as entrepreneurial training, leadership development and how to access capital. Plus, his staffers are available to answer questions on how to get information on government assistance programs, he said.
Harrington agreed with Busby that access to capital remains a problem for Black businesses. He said his organization links Black entrepreneurs with member banks with the goal of the two parties to get to know each other and developing a working relationship.
Harrington said his staff also assists members when government financial assistance applications, such as the PPP, need to be filled out.
“We want to make sure that when one of our members fills out an application for one of the SBA programs it is done right,” he said. “One error will kick the application out of the system.”
While Busby and Harrington encourage membership in their organizations for assistance, both said they will help anyone who seeks them out.
“We primarily serve our members but if someone needs help, we won’t turn them away,” Harrington said.