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Some Upbeat News for Black Businesses Still Reeling From Pandemic Losses

During a news briefing hosted by Ethnic Media Services last month, speakers discussed how small businesses in California and around the country can emerge from this crisis, catch the wave of what seems to be a gathering economic boom, or continue to tread water to stay afloat. 

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Happy black waitress with face mask and gloves holding open sign while reopening during coronavirus epidemic./Shutterstock

Next week, after more than a year, California is expected to lift the majority of its COVID-19 related restrictions and reopen its economy at almost-full capacity. 

But as the state prepares for a long-anticipated comeback, many Black business-owners say enterprises across the state that African Americans own face an uphill road to recovery. 

“It’s a state of disrepair. They need significant support,” said Tara Lynn Gray, director of the California Office of the Small Business Advocate.  

Black-owned business operators who are struggling will need all the financial support available to them, Gray told California Black Media (CBM) at a luncheon hosted by the California Black Chamber of Commerce in Sacramento.

(Black businesses) have been disproportionately affected by COVID-19,” Gray said. “Fortunately, the governor has stepped up and provided $2.5 billion dollars in relief funds to all small businesses with priority to the disadvantaged communities of color.”

In February 2020, there were 1 million Black-owned businesses in operation around the United States, according to a University of California at Santa Cruz report.

About six weeks later, after the onset of the global COVID-19 pandemic, the number of Black business owners had dropped to 440,000, a 41%, reduction. Many of them had to shut down their businesses for good. 

During the same time, only 17% of white proprietors had to shut down their businesses, UC Santa Cruz research shows. Overall, nearly 4 million minority-owned U.S. firms, whose annual sales total close to $700 billion, shuttered because of COVID-19.

But despite the grim statistics, a number of small business advocates say there is financial help available both at the state and federal levels for most business-owners. 

During a news briefing hosted by Ethnic Media Services last month, speakers discussed how small businesses in California and around the country can emerge from this crisis, catch the wave of what seems to be a gathering economic boom, or continue to tread water to stay afloat. 

The main objective of the briefing was helping small businesses, particularly minority owned ones, connect to various sources of funding created to help them recover from the pandemic. 

The key is to apply for the money, said Everett Sands, CEO of Lendistry, a leading, Black-led Community Development Financial Institution (CDFI) and Community Development Entity (CDE) that is also a small business and commercial real estate lender. 

“Let’s make an assumption. If you are allowed to open, and you can open, then therefore you should be able to receive some type of revenue,” Sands said. “What we’ve learned about the pandemic is that most opportunities are coming a second time. If you look at the Paycheck Protection Program (PPP), it came a third time. But it is important for businesses to apply.”

The Paycheck Protection Program (PPP) is a federal revenue replacement program designed to sustain small business jobs during the ongoing public health and economic crisis. May 31 was the last day for small business owners operating in low-income neighborhoods to apply for the third round of PPP loans.

In California, Lendistry helped thousands of small businesses secure loans and grants during the pandemic. Funded by the State of California through the California Office of the Small Business Advocate, Lendistry, was the state-contracted administrator of the program that administered six rounds of grant funding for non-profits and underserved businesses.

Sands was one of the guest speakers along with U.S. Congressman Ro Khanna (D-CA-17), a member of the Congressional Small Business Caucus, and Virginia Ali. Ali owns the nationally renowned restaurant and Black-owned small business Ben’s Chili Bowl in Wash., D.C.

Sands said before the virus surfaced, minority businesses were already in a “financially precarious position” with strained resources. Small businesses had limited access to capital, he said, and they lacked the infrastructure to apply for loans or contracts and many of them couldn’t self-finance in the long term.

But on the cusp of the state and U.S. economies reopening, Sands says it is not too late for businesses to get their financial footing. 

“As a result of the American Rescue Plan, most states received roughly $1 billion to help these small businesses increase their revenues” he said.

Of California’s 4.1 million small businesses, 1.2 million (29%) are minority-owned.  ZIPPIA, an online career support company, calculated that 10,287 Black-owned businesses operate in California. According to the June 2020 report by ZIPPIA, titled the “Most Supportive States for Black Businesses,” California ranked No. 4 before the pandemic. Based on data compiled by the United States Census’ Annual Business Survey, California’s Black businesses employ roughly 81,530 people. 

Gray said restaurants, barbershops, nail salons, hair salons, hospitality, and personal grooming services have been “inexplicably hurt” due to social-distancing restrictions in the state.

Those businesses, owned by many African Americans, were not deemed as essential when a shelter-in-place order was mandated. Now those are the businesses that Newsom intends to help, Gray stated.

“Our governor had a tough choice to make,” Gray said. “You close things down to make sure people are safe. Public health is a serious issue. I applaud him for doing that. Yes, there are consequences to our small businesses. But in the end, look at us now. We have the lowest positivity rate in the nation. Also, it looks like our economy is coming back.”

A survey conducted by H&R Block found that out of 3,000 small businesses, 53% of Black business operators saw their revenues cut in half due to the pandemic as compared to 37% of White owners. 

Black-owned small businesses continue to experience disproportionate difficulties, with 35% of Black entrepreneurs reporting that business conditions are worsening. Many say they may not survive the next three months.

While the reopening of the economy signals progress, Sands is encouraging Black businesses to pay attention to Small Business Administration programs (SBA) that include loans, a restaurant relief fund and venture capital investments.

To apply for federal small business funding, Sands says, a company only has to show the sole business’ gross revenue. Applicants won’t be excluded if the proprietor has been a borrower on a defaulted student loan or has a criminal history.

“For amounts less than $150,000, most of the red tape or the bureaucratic process of a loan has been cleared away,” Sands said. 

Khanna said more funding is expected to be distributed through the Saving Our Street Act, which would allocate loans of up to $250,000 to businesses with fewer than 10 employees.

Distribution of the money will be based on the racial and gender diversity of the business owners, he said, and it should help the economy get stronger and financially stabilize the country.

“In this next quarter, we’re going to have a pretty good recovery,” he said. “Consumer spending is at 10% growth. I think small businesses are going to come back strong. The problem is a lot of businesses that have had to close may not be able to reopen. And that’s where we have to focus: assisting with debt forgiveness and capital for those businesses that would not survive.”

 

Bay Area

Mayor Breed Proposes Waiving City Fees for Night Markets, Block Parties, Farmers’ Markets, Other Outdoor Community Events

Mayor London N. Breed introduced legislation on April 26 to encourage and expand outdoor community events. The first will waive City fees for certain events, making them less costly to produce. The second will simplify the health permitting for special event food vendors through the creation of an annual permit. Both pieces of legislation are part of the Mayor’s broader initiative to bring vibrancy and entertainment to San Francisco’s public right of ways and spaces.

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Outdoor community events are integral to San Francisco’s vibrant culture and sense of community. iStock image.
Outdoor community events are integral to San Francisco’s vibrant culture and sense of community. iStock image.

Mayor’s Press Office

Mayor London N. Breed introduced legislation on April 26 to encourage and expand outdoor community events.

The first will waive City fees for certain events, making them less costly to produce. The second will simplify the health permitting for special event food vendors through the creation of an annual permit. Both pieces of legislation are part of the Mayor’s broader initiative to bring vibrancy and entertainment to San Francisco’s public right of ways and spaces.

Outdoor community events are integral to San Francisco’s vibrant culture and sense of community. These events include night markets, neighborhood block parties and farmers markets, and bolster the City’s economy by supporting local businesses and attracting tourists eager to experience San Francisco’s unique charm and food scene.

They offer residents, workers and visitors, opportunities to engage with local artists, musicians, and food vendors while enjoying the San Francisco’s stunning outdoor spaces and commercial corridors.

The legislation will allow for more and new community gatherings and for local food vendors to benefit from the City’s revitalization.

“San Francisco is alive when our streets are filled with festivals, markets, and community events,” said Breed. “As a city we can cut fees and streamline rules so our communities can bring joy and excitement into our streets and help revitalize San Francisco.”

Fee Waiver Legislation

The events that can take advantage of the new fee waivers are those that are free and open to the public, occupy three or fewer city blocks, take place between 8 a.m. and 10 p.m., and have the appropriate permitting from the ISCOTT and the Entertainment Commission.

The applicant must be a San Francisco based non-profit, small business, Community Benefit District, Business Improvement District, or a neighborhood or merchant association. Fees eligible for waiver include any application, permit, and inspection/staffing fees from San Francisco Municipal Transportation Agency, Department of Public Health, Fire Department, Entertainment Commission, and Police Department.

Currently, it can cost roughly anywhere between $500-$10,000 to obtain permits for organized events or fairs, depending on its size and scope. Organizations and businesses are limited to a maximum of 12 events in one calendar year for which they can receive these fee waivers.

Food Vendor Streamlining Legislation

The second piece of legislation introduced will help special event food vendors easily participate in multiple events throughout the year with a new, cost-effective annual food permit. Food vendors who participate in multiple events at multiple locations throughout the year will no longer need to obtain a separate permit for each event. Instead, special event food vendors will be able to apply and pay for a single annual permit all at once.

“Many successful food businesses either begin as pop-up vendors or participate in special events to grow their business,” says Katy Tang, Director of the Office of Small Business. “Giving them the option for an annual special event food permit saves them time and money.”

Currently, food vendors are required to get a Temporary Food Facility (TFF) permit from the Department of Public Health (DPH) in order to participate in a special event, among permits from other departments.

Currently, each special event requires a new permit from DPH ranging from $124-$244, depending on the type of food being prepared and sold. Last year, DPH issued over 1,500 individual TFF permits. With the new annual permit, food vendors selling at more than four to six events each year will benefit from hundreds of dollars in savings and time saved from fewer bureaucratic processes.

“This legislation is a step in the right direction to make it easier for food vendors like me to participate in citywide events,” said Dontaye Ball, owner of Gumbo Social. “It saves on time, money and makes it more effective. It also creates a level of equity.”

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Bay Area

Faces Around the Bay: Sidney Carey

Sidney Carey was born in Dallas, Texas. He moved with his family to West Oakland as a baby. His sister is deceased; one brother lives in Oakland. Carey was the Choir Director at Trinity Missionary Baptist Church for 18 years.

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Courtesy of Sidney Lane.
Courtesy of Sidney Lane.

By Barbara Fluhrer

Sidney Carey was born in Dallas, Texas. He moved with his family to West Oakland as a baby. His sister is deceased; one brother lives in Oakland.

Carey was the Choir Director at Trinity Missionary Baptist Church for 18 years.

He graduated from McClymonds High with a scholarship in cosmetology and was the first African American to complete a nine-month course at the first Black Beauty School in Oakland: Charm Beauty College.

He earned his License, and then attended U.C., earning a secondary teaching credential. With his Instructors License, he went on to teach at Laney College, San Mateo College, Skyline and Universal Beauty College in Pinole, among others.

Carey was the first African American hair stylist at Joseph and I. Magnin department store in Oakland and in San Francisco, where he managed the hair stylist department, Shear Heaven.

In 2009, he quit teaching and was diagnosed with Congestive Heart Failure.  He was 60 and “too old for a heart transplant”.  His doctors at California Pacific Medical Center (CPMC) went to court and fought successfully for his right to receive a transplant.  One day, he received a call from CPMC, “Be here in one hour.”  He underwent a transplant with a heart from a 25-year- old man in Vienna, Austria

Two years later, Carey resumed teaching at Laney College, finally retiring in 2012.

Now, he’s slowed down and comfortable in a Senior Residence in Berkeley, but still manages to fit his 6/4” frame in his 2002 Toyota and drive to family gatherings in Oakland and San Leandro and an occasional Four Seasons Arts concert.

He does his own shopping and cooking and uses Para Transit to keep constant doctor appointments while keeping up with anti-rejection meds. He often travels with doctors as a model of a successful heart-transplant plant recipient: 14 years.

Carey says, “I’m blessed” and, to the youth, “Don’t give up on your dreams!”

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Business

Maximizing Your Bank Branch Experience

In a world of online tools that let you make banking transactions with the touch of a button, the idea of visiting a branch might seem unnecessary. However, if you haven’t visited your local branch recently, you might be surprised by what it has to offer. Your branch is much more than a place to deposit and withdraw money – it can offer the opportunity to build valuable relationships with people who can help you achieve financial independence.

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Diedra Porché, National Head of Community Banking, JPMorgan Case & Co.
Diedra Porché, National Head of Community Banking, JPMorgan Case & Co.

Sponsored by JPMorgan Chase & Co.

In a world of online tools that let you make banking transactions with the touch of a button, the idea of visiting a branch might seem unnecessary.

However, if you haven’t visited your local branch recently, you might be surprised by what it has to offer. Your branch is much more than a place to deposit and withdraw money – it can offer the opportunity to build valuable relationships with people who can help you achieve financial independence.

Diedra Porché, Head of Community and Business Development at Chase, talks about how the bank model has evolved to maximize the branch experience for customers; how connecting with your local branch team can help you think differently about money and investing for your future.

How can a customer feel connected to a bank branch?

I love that question because we ask ourselves the same thing every day. Being part of the community means meeting with local leaders to find out what they need from us and then designing our branches around that. For example, at some of our community branches we have what we call a living room where we can host financial workshops, small business pop-up shops or nonprofit organization meetings. We also hire locally. You feel much more connected talking about financial aspirations with people from your community who went to the same high school, place of worship or maybe frequented the same recreation center down the street when they grew up.

How can I build a relationship with my bank?  

Customers should feel comfortable sharing their goals, needs and wants with their banker. Also, it helps to remember the Community Manager is there to help solve your finance challenges and build a roadmap for success. You might have a short-term or long-term goal to open a business, build your credit, become debt-free, buy a home, or save for retirement, and our community team can help. At Chase, we strive to make dreams possible for everyone, everywhere, every day. Your financial future starts with building those relationships.

How can customers change negative perceptions they have about managing their money?

Far too often, customers are intimidated when they visit a bank. Our goal is to demystify banking and money myths empowering people to make the right decisions. For example, a big myth is assuming you need a lot of money to have a bank account. You don’t! Another myth is you need to carry a balance on your credit card to build credit — actively using your credit card can demonstrate that you can use credit responsibly but carrying a balance won’t necessarily improve your credit score. Finally, understanding mobile and online banking safety is key. There are so many safeguards and protections in place to guard your personal information and funds.

What’s an easy step one can take to shift their financial behavior right now?

Cultivating self-awareness is a good first step. Start by taking inventory of your spending. Be honest with yourself about what you need and what you want. Too often, people confuse the two, which leads to bad decisions. Rent is something you need to pay. An extra pair of shoes is something you may want but before you buy them ask yourself if that’s the best use of your hard-earned money. Too often, our beliefs and our fears shape our financial realities. If any of those beliefs are limiting your financial behavior, it’s important to question and examine them, and then decide you’re open to learning something different.

What’s one perception about banking that you’d like to change?

I think folks are surprised there are so many resources available and accessible both at our branches and online, it’s always a good idea to visit a nearby branch and speak to a Community Manager or banker. Outside of what we offer in-branch, our teams also work with local neighborhood partners who provide a variety of services to support the community, businesses and residents. I received a unique piece of feedback from an employee who started with the bank and had lived in the same community his whole life. When he visited his local community branch, he said, “Diedra, when I walked in, I felt dignified.” Every time I recount that story, it warms my heart because that’s what we want — we want our centers to belong to the community.

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