Black-owned businesses struggle accessing funds during pandemic

RALEIGH, N.C. (WTVD) -- As President Biden commits to a more equitable PPP rollout process, Black-owned small businesses continue to face difficulties.

According to a report by UC Santa Cruz, from February to April 2020, the number of active Black-owned businesses decreased by 41%, more than double the rate of white-owned businesses.

"Access to capital has been a historically disparate situation for black-owned small businesses," said Kevin Dick, the President and CEO of Carolina Small Business Development Fund.

This week, the organization is hosting Black Entrepreneurship Week, sharing guidance and advice to business owners across the state.

"(We're) trying to provide Black-owned small businesses with information related to accessing capital, related to secure contracts with public and private sector entities, how to pivot in the face of the pandemic," said Dick.

The Carolina Small Business Development Fund has provided financial assistance to about 1,100 businesses since the beginning of the pandemic.

"Because of the criteria that were put in place for the programs, they tended to offset some of the typical disparities that Black-owned businesses and other businesses of color face. So we have had some success more locally-based programs through grants and loans," said Dick.

While business owners are hopeful decreasing COVID-19 metrics and increasing vaccinations help bring customers back, many have already had to make sharp adjustments.

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"You have to be aggressive and say - 'what can I do to help my business survive,'" said Alison Kim Perry, owner of Cute Buttons Gift & Paper Boutique.

After operating as a brick-and-mortar location in the Triangle for more than a dozen years, Perry underwent a major shift at the end of 2020.

"I went from full-service brick and mortar with employees to a custom studio in Raleigh," said Perry.

Her sales were down 46% last year, but online traffic helped make up for lagging in-store business.

"You have to be nimble, you have to save money, you have to find ways to be creative. And if you didn't, you're going to be in trouble," Perry explained.

She received an Economic Injury Disaster Loan, but chose not to apply for a PPP loan as she did not want to take on additional debt.

Throughout the pandemic, she has found support from fellow Black-business owners.

"You have to network more. You have to build a circle of people who are more supportive and everyone's in the same boat and find out how to work together," said Perry.

Even for businesses that have received grant or loan money, Perry is urging owners to increase their knowledge.

"No matter how much cash you get from the federal government or whomever, if you don't know your numbers and how to make sure you P and L statements are up to par, and being very nimble about saving, those kinds of things can hurt you," Perry explained.

Perry understands the financial difficulties many shoppers may be experiencing, and offered ways for people to support small businesses, even if they can't spend money.

"Share posts on social media, refer a friend, tell people about them, write a good review on Yelp or any other means. Just talk them up," said Perry, who suggested people who are uncomfortable or unable to shop in person should look to see if they can purchase products online.

Dick believes consumers don't always provide fair opportunities to Black-owned businesses.

"Even within the Black community, there's sort of less patience if there's a bad customer experience or something happens that is not quite in line with a customer's expectations at a Black-owned business. That business may have one chance (to make an impression). Whereas a majority-owned business, there will be more of a willingness to try that business again. So I think that stigma has to be removed. But also there has to be an intentionality in finding those (Black-owned businesses)," said Dick.

Black Entrepreneurship Week runs thru Friday. If you're interested in signing up, click here.
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