Black-owned businesses in Tallahassee bear the brunt of COVID impact
From getting loans to immunization, COVID-19 has presented unique challenges for the African American community.
âIt was horrible,â said Antonio Jefferson, chairman of the Big Bend Minority Chamber of Commerce in Tallahassee, which supports women-owned and minority-owned businesses in the five-county area of ââLeon, Gadsden, Wakulla, Franklin and Jefferson. “I think we in our community ended up with so much uncertainty and it created a lot of negative impacts on minority owned businesses.”
Local journalist Lynn Hatter, a black woman, and her husband Jason Tereska, who is white, started a small delivery business in June 2019. Tereska quit her job to start Haulin ‘A-Way, which offers delivery services , debris removal and relocation. It has two hourly part-time employees.
Hatter said they were really excited as 2020 approached until the pandemic put an end to normal activities just a few months into the year.
âIt was supposed to be our first full year in business and here we are with this little baby business that seems to go broke before it’s even nine months old,â she said. “And so we were really concerned about how we were going to survive.”
Start “from a very different place”
Many minority businesses are small businesses or sole proprietorships. Black-owned businesses often start with less funding and support. Jefferson said that because local minority-owned businesses lacked excess capital, they were disproportionately affected by the pandemic.
According to the Hamilton Project, an economic policy initiative of the Brookings Institution, in 2019, median white households held $ 188,200 in wealth, more than 7.8 times that of black households.
âSo that means you probably don’t have a real banking relationship, you don’t have friends and family who have large pots of wealth to invest,â Jefferson said. âSo you start from a very different place. ”
Leon County and the City of Tallahassee moved in March 2020 to quickly provide financing to small businesses economically affected by COVID-19. The COVID-19 Disaster Relief Emergency Grants (ERRC) program has allocated up to $ 1 million to businesses. Leon County and Tallahassee City Commissioners approved additional funding in April 2020 for nonprofits and more small businesses.
This early local relief was important for minority-owned business owners, Jefferson said, because many black-owned businesses were initially unable to gain access to the Paycheck Protection Program (PPP) Congress cleared in March. 2020 which aimed to provide loans to small businesses across the country.
Jefferson said African-American businesses struggle to get PPP loans because local banks only want to do business with people who already have accounts with them.
“It was their priority even if they could be opened to these opportunities for any business, because it was really only the government guarantee of the loan which did not ultimately have to be repaid,” he said. he declared. “At first it was difficult and the big guys, the companies that had CPA firms, were able to immediately apply. They had the banking relationship and the African Americans didn’t.”
Hatter and Tereska applied for a PPP loan in early April 2020. Unlike other minority-owned businesses, they had an accountant and a relationship with a regional bank. However, Hatter said his bank was not eligible in the first round of applications. So they went to a mid-sized bank that serves the Deep South states from Florida to Texas.
“And I had a long conversation with a representative from Hancock Bank and he explained everything to me and finally he said to me,” But I can’t help you fill out this because you don’t have account with us, “” she said. noted.
Hatter said that after trying other institutions to access the loans, their own bank began to accept applications. But she said she couldn’t get the bank to call her back even though she had called them frequently for several weeks.
âAt one point I put the phone down and I was so angry and I was like, ‘If they can’t help us then I’m going to look for someone who can,'” said Hatter.
She said she went to the bank, closed all of their accounts and transferred them to a local credit union. Later that day, she received a call from that bank apologizing and offering to help her with a PPP loan. Hatter said they got the loan, but only on the condition that they reopen their accounts there.
Jefferson said Congress changed the rules for PPP loans in subsequent cycles, which made it much easier for minority-owned businesses to access that financing. The Office of Economic Vitality recently reported that available PPP data showed that Tallahassee businesses had received more than 8,440 loans, worth around $ 557 million.
Hatter said he was able to get his $ 6,250 PPP loan canceled this year, but only after waiting several months. The loan officer told them after being forgiven that their business, which had generated $ 49,000 in profits, and another business, which had over $ 1 million in revenue, had been selected by the IRS for an audit, delaying the process.
âLooking back, the money was very helpful because it got us through it,â she said. “But the experience was horrible.”
Grim statistics in the midst of a murky picture
As some minority-owned businesses were unable to even access the PPP loan application process or did not have the capital to continue operating, there were closures. But, there is no clear picture yet of the number of black and minority-owned businesses closed due to the pandemic, locally or nationally.
Robert Fairlie, professor of economics at the University of California at Santa Cruz, found that the number of African-American business leaders working across the country fell by more than 40% between February and April 2020. Latin American business assets had fallen 36% and women … owned businesses fell by a quarter during that time.
Fairlie also found that the total number of small businesses active during that window fell 3.3 million or 22%. The figures rebounded in May by 7 percent and 8 percent in June. Fairlie told Congress last February that while he saw improvement in small business activity from April to October 2020, activity fell 6% in November and December. That was up to a 10 percent drop for minority owners.
The Office of Economic Vitality said Leon County had lost 184 employers in the “other services” category, which includes dry cleaners, car washes, nail salons and laundry supply companies in the fourth. quarter of 2020, compared to this period in 2019. However, the county gained 215 in health and social assistance businesses during those same respective periods. OEV does not break down its statistics by ethnicity of business owners.
Hospitality and food services lost more than 3,100 jobs in the last quarter of 2020 compared to this period in 2019, but the administrative sector added 903 positions during this period.
‘We are all in the same boat’
The rapid increase in the delta variant made Florida again a hotspot for COVID-19 cases in the summer of 2021. In early August, one in five infections, hospitalizations and deaths in the United States occurred. in Florida.
According to statistics from the Kaiser Family Foundation, in October, 56% of whites in Florida had been vaccinated, compared to 36% of blacks. The percentage of Hispanics is 54 percent.
Jefferson said much more encouragement is needed for African Americans to get vaccinated after the vaccines roll out in late December 2020 and January of this year. He said the early focus on older people made some in his community reluctant to get it.
âIt is obvious that this is a much more vulnerable population than the young people in our community,â said. “However, what he did was he created what I believe in the African American community was a lack of belief that a vaccine was an option or an option they had to believe in.”
Jefferson said as time passed and more misinformation and misinformation about vaccines spread on social media, the reluctance only grew.
âIf everyone takes it together, I think then people say, ‘I’m in it, okay. I have to understand, I don’t have this waiting time and other environmental influences that can change, âhe said.
The lower vaccination rate among African Americans in Florida is also linked to the horrific history of health care experiences African Americans have had nationally and the mistrust of the government, Jefferson said. He said the Big Bend House of Minorities spend a lot of time explaining to people why they should get vaccinated. He sees Leon County as more progressive and community-oriented than other parts of the state.
âI think COVID has only shown us that if we’re all in the same boat, our community can continue to survive and thrive,â he said. “And realize that these negative aspects that we face and being able to deal with them aggressively quickly creates a rugged place that doesn’t have those kind of pendulum swings of decline or tilt one way or the other. . “
Jefferson said the minority business community still has a long way to go locally. A top priority is to ensure that women and minority businesses have access to capital. He said the programs that were put in place during the pandemic must become permanent.
“If we don’t create programs and opportunities that are going to continue beyond COVID, once that money or those opportunities run out, we’re going to be left behind and we’re going to be forced to back down,” a- he declared. noted.
About this project
This project is funded by the Knight Foundation as part of its Community Grants program, which supports projects that promote economic opportunity through the arts, journalism and entrepreneurship. The project, which is published in the online and print editions of The Democrat over a series of days, is a partnership between Knight, The Village Square, the Community Foundation of North Florida and Skip Foster Consulting. See more stories from the project at www.tallahassee.com/pandemic-economy. This series is available to all readers online, but we hope you will subscribe to support local journalism like this at offers.tallahassee.com.
Never miss a story: subscribe to the Tallahassee Democrat using the link at the top of the page.