From getting loans to getting vaccinated, COVID-19 has presented unique challenges for the African American community.
“It was horrible,” said Antonio Jefferson, president of the Big Bend Minority Chamber of Commerce in Tallahassee, which supports women- and minority-owned businesses in the five-county region of Leon, Gadsden, Wakulla, Franklin and Jefferson. “I think we in our community were left with so many uncertainties and that created a lot of the 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 company in June 2019. Tereska quit his job to start Haulin’ A-Way, which offers delivery, debris removal and moving services. It has two part-time hourly employees.
COVID at Work: A look at the pandemic's legacy on Tallahassee businesses
Hatter said they were really excited going into 2020 until the pandemic shut down normal activities just a few months into the year.
“This was supposed to be our first full year in business and here we are with this little baby business that looks like it’s going to go belly-up before it’s even nine months old,” she said. “And so we were really concerned about how we were going to survive.”
Starting off 'from a very different place'
Many minority businesses are small or sole proprietorships. Black-owned businesses often start out with less funding and support. Jefferson said because local minority-owned businesses lacked excess capital, they were disproportionately hurt 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.
“So that means that you probably don’t have real banking relationships, you don’t have friends and family that have significant pots of wealth to invest,” Jefferson said. “So you start off from a very different place.”
Leon County and the City of Tallahassee moved in March 2020 to quickly provide funding to small businesses economically affected by COVID-19. The COVID-19 Emergency Disaster Relief Grant Program (CEDR) allocated up to $1 million to businesses. Leon County and City of Tallahassee commissioners approved additional funding in April 2020 for non-profits and more small businesses.
That early local relief was important to minority business owners, Jefferson said, because many Black-owned businesses could not initially access the Paycheck Protection Program (PPP) Congress authorized in March 2020 that aimed to give loans to small businesses across the country.
Jefferson said African American businesses struggled to get PPP loans because local banks only wanted to do business with people who already had accounts with them.
“That was their priority even though they could be open to those opportunities for any business because it was really just the government guarantee of the loan that ultimately didn’t have to be paid back,” he said. “So initially it was hard and the big guys, the companies that had CPA firms, were able to immediately get their applications in. They had the banking relationship and African Americans did not have that.”
Hatter and Tereska sought a PPP loan in early April 2020. Unlike some other minority-owned businesses, they did have an accountant and a relationship with a regional bank. However, Hatter said their bank wasn’t eligible in the first round of applications. So they went to a mid-size bank that serves states in the deep South from Florida to Texas.
“And I had a long conversation with a representative at Hancock Bank and he walked me through everything and finally he was like, ‘But I can’t help you fill this out because you don’t have an account with us,’ ” she said.
Hatter said after trying other institutions to get access to the loans, their own bank had started to accept applications. But she said she couldn’t get the bank to call her back even though she was calling them frequently for several weeks.
“At one point I threw down the phone and I was so mad and I was like, ‘If they can’t help us, then I’m going to go find somebody who can,’ ” Hatter said.
She said she went down to the bank, closed all of their accounts and moved them to a local credit union. Later that day, she received a call from that bank apologizing and offering to help with a PPP loan. Hatter said they got the loan, but only under the condition they reopen their accounts there.
Jefferson said Congress modified the rules of the PPP loans in later rounds that made it much easier for minority-owned businesses to access that funding. The Office of Economic Vitality recently reported that available PPP data showed Tallahassee businesses received more than 8,440 loans, worth around $557 million.
Hatter said they managed to get their $6,250 PPP loan forgiven this year, but only after waiting several months. The loan officer told them after it was forgiven that their business, which had generated $49,000 in profit, and another business, which had more than $1 million in revenue, had been selected by the IRS for an audit, delaying the process.
“In hindsight, the money was really helpful because it helped float us through,” she said. “But the experience was horrible.”
Grim statistics amid a murky picture
With some minority-owned businesses unable to even access the PPP loan application process or not having the capital to keep operating, there were closures. But, there’s no clear picture yet of how many black and minority-owned businesses closed because of the pandemic, locally or nationally.
Robert Fairlie, an economics professor at the University of California at Santa Cruz, found that the number of working African American business owners across the country plunged more than 40 percent between February and April 2020. Working Latino business owners dropped by 36 percent and women-owned businesses fell by a quarter during this period.
Fairlie also found the number of overall working small businesses during that window plummeted by 3.3 million or 22 percent. The numbers rebounded in May by 7 percent and 8 percent in June. Fairlie testified to Congress this past February that while he saw improvement in small business activity from April to October 2020, activity dropped by 6 percent in November and December. It was up to a 10 percent drop for minority owners.
The Office of Economic Vitality said Leon County has lost 184 employers in the category “other services,” which includes dry cleaners, car washes, nail salons and linen supply companies in the fourth quarter of 2020, compared with that period in 2019. However, the county gained 215 in health and social assistance businesses in those same respective periods. OEV does not break down its statistics by the ethnicity of business owners.
Hospitality and food services were down more than 3,100 jobs in the last quarter of 2020 compared to that timeframe in 2019, but the administrative sector added 903 positions during that period.
'We're all in this together'
The rapid rise of the delta variant again made Florida a hot spot for COVID-19 cases in the summer of 2021. By early August, one out of every five infections, hospitalizations and deaths in the U.S. occurred in Florida.
According to Kaiser Family Foundation statistics, as of October, 56 percent of whites in Florida have been vaccinated, compared to 36 percent of blacks. The percentage of Hispanics is 54 percent.
Jefferson said there needed to be a lot more encouragement for African Americans to get vaccinated after the vaccines were rolled out in late December 2020 and January of this year. He said the early focus on the elderly made some in his community hesitant to get it.
“Obviously they’re a lot more vulnerable population than young individuals in our community,” said. “However, what it did was it created what I believe in the African American community was a lack of belief that a vaccine was an option or an option that they needed to believe in.”
Jefferson said that as time progressed and more misinformation and disinformation about the vaccines was put out on social media the hesitancy only grew.
“If everyone’s taking it together, I think that then folks say ‘I’m in, OK. I gotta get this, I don’t have that wait time and other environmental influences that may change,’ ” he said.
The lower vaccine rate among African Americans in Florida also has to do with the horrible history of healthcare experiences African Americans have had nationally and the distrust of the government, Jefferson said. He said the Big Bend Minority Chamber spends a lot of time educating people on why they should get vaccinated. He sees Leon County as more progressive and community focused than other areas of the state.
“I think COVID has only shown us that if we’re all in it together then our community can continue to survive and thrive,” he said. “And realize that these negatives that face us and being able to aggressively address them quickly creates a robust place that doesn’t have these kinds of pendulum swings of decline or incline one way or the other.”
Jefferson said the minority business community still has a long way to go locally. A top priority is making sure that women and minority-owned businesses have access to capital. He said the programs that were stood up during the pandemic need to become permanent.
“If we’re not creating programs and opportunities that are going to continue beyond COVID, once that money or once those opportunities run out we’re going to be left back and we’re going to be forced back to a decline,” he said.
About this project
This project is funded by the Knight Foundation as a part of its community grant program, which supports projects which promote economic opportunity through the arts, journalism and entrepreneurship. The project, which is being published in online and print editions of the Democrat over a series of days, is a partnership of 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 online readers, but we hope you’ll subscribe to support local journalism like this at offers.tallahassee.com.
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This article originally appeared on Tallahassee Democrat: Black-owned businesses in Tallahassee feel brunt of COVID’s impact