Color Of Change is petitioning Congress to provide targeted federal funding to ensure Black-owned businesses survive the coronavirus pandemic.
“Black businesses and their employees are being locked out of the federal coronavirus relief fund. Congress’ current small business relief program assumes that all business owners have equal access to credit and to banking services,” the petition states. "But we know that has never been the case. From redlining to the refusal to provide loans, Black people in this country have historically been locked out of entrepreneurship.”
In a nation that continues to be ravaged by the pandemic, Color Of Change asserts that raised stakes and a history of disenfranchisement leave Black business owners — and the communities they serve — especially vulnerable.
“According to a 2016 study by the Stanford Institute for Economic Policy, only 1% of Black-owned businesses received a bank loan in their first year of operation, compared to 7% of white businesses,” the Color Of Change petition stated. “Generational inequalities in healthcare, housing, and employment mean that Black people are more likely to die from COVID-19 than any other demographic in the U.S. Unless Congress provides direct relief to small business owners, Black communities will continue to disproportionately share the burden of this crisis.”
In its demands for federal funding and public accounting of how $2 trillion in stimulus funding was allocated, Color Of Change implored Congress to “cut out the middleman” and provide direct relief to Black businesses and employees.
“This includes funds for direct payroll support, as well as covering all costs to maintain the business,” the nation’s largest online racial justice organization said. “Making sure that businesses, especially Black owned businesses, can maintain payroll through direct transfers rather than loans will ensure these businesses can survive the crisis, get money into the hands of people more quickly, and relieve the strain on a patchwork of state unemployment systems.”
Source of Knowledge, a Black-owned New Jersey bookstore, knows the vital importance of targeted COVID-19 relief.
The store, buried by overhead, was forced to turn to GoFundMe to keep its doors open, as Blavity previously reported.
“Without our customers weekly support by way of purchases we are unable to maintain our daily needs to keep up with our business debts. Your donations will make sure our doors stay open and our employees are able to eat and pay bills," the store's GoFundMe page stated. "These funds will be used immediately so that we don't fall any further behind on our bills as well as preparing for that day when we can safely serve our community."
The Brookings Institute remains abreast of the tight-knit nature of Black-owned businesses and the customers they serve. A 2020 study illuminated the chasm between Black businesses’ customer satisfaction rates and their lacking profit margins, as Blavity previously reported.
While minority-owned businesses often receive high ratings on business review platforms like Yelp, they still see less revenue than white-owned establishments.
Additionally, financial experts fear 95% of Black-owned businesses are being shut out of COVID-19 financial relief.
Indeed, Color Of Change’s petition demands “small business grants, not loans” in order to help struggling businesses stay afloat, as Black patrons have been disproportionately victimized by the virus. According to the organization, the federal government has a lot to gain from upping their investment in Black businesses — many of them proving more essential than ever.
“Today, Black-owned firms with paid employees generate over $103 billion annually,” the petitioners explain. "The largest share of that revenue comes from Black-owned businesses in the health care and social services sector. By providing a paycheck guarantee to businesses directly, you have the opportunity to invest in essential industries, to prevent countless layoffs.”
