Black-owned eateries buoyed by grassroots support since virus hit
WASHINGTON, USA – Outside the Southwest Soda Pop Shop in the United States capital, a long line of customers waits, both to buy ice cream and to show solidarity with restaurants owned by African Americans, a community particularly hard hit by the coronavirus pandemic.
"We went from 30 customers to 300 customers on a weekday. It's crazy," said Andrea Jones, the daughter of the ice cream parlor's owner.
"Every day, the line gets longer," the 21-year-old said.
"They come out rain or shine, they bring their umbrella. They support us no matter what. It's beautiful to see."
The shop, which sits on the banks of the Potomac River, had to close because of the virus, causing huge financial strain until Jones called for support on Twitter the day before a huge anti-racism protest in the US capital.
Her tweet was shared almost 30,000 times.
In recent weeks, as the nation has focused on race issues in the wake of the killing of unarmed black man George Floyd in police custody, there has been an explosion of solidarity and support from activists, as well as social media and commercial campaigns, to boost African-American restaurant owners.
Uber Eats, the food delivery service run by the rideshare giant, launched a filter to promote black-owned restaurants on June 4 in several cities in the United States and Canada, and eliminated delivery fees for those eateries.
Numerous studies have shown that black business owners, and in particular those in the food industry, have been among the worst hit during the COVID-19 pandemic and the subsequent economic chaos.
"Oh man, it was almost devastating," said Oji Abbott, the owner of Oohh's and Aahh's soul food restaurant who is also known as Chef O.
"We lost probably every revenue stream of money that you could lose," the 45-year-old said.
Close to Howard University, one of the most prestigious historically black colleges in the country, the eatery saw the flow of tourists and students dry up overnight.
Just down the street, Ben's Chili Bowl, which famously counted Martin Luther King Jr as one of its customers in the days of civil rights marches in Washington, saw its business drop by 80% during the lockdown.
"Black-owned businesses tend to be much smaller, they have thinner profit margins," said Sifan Liu, a research analyst with the Metropolitan Policy Program at the Brookings Institution.
"And they also have greater credit constraints and therefore, they are very vulnerable in any recession, and particularly this one," she said.
Between February and April 2020, 41% of small businesses with African-American owners closed due to the coronavirus, according to a report by the National Bureau of Economic Research published in June.
During the same period, only 17% of small businesses with white owners went under.
Hard to get capital
As with many black-owned businesses, the proprietors of Ben's Chili Bowl and Oohh's and Aahh's were excluded from the first wave of the Trump administration's loans to help keep small businesses afloat – a vital lifeline for many.
"In the first round of the PPP (Paycheck Protection Program), the application process relied on mainstream financial institutions to deliver loans, which favored existing customers at large banks," said Liu.
"And because black business owners are likely to be unbanked or underbanked, they just don't have those existing relationships and they are less likely to get those loans," she said.
Abbott opened his eatery in 2003 with $30,000 of his own savings. He has never relied on a bank to help grow his business.
"In general, access to capital is hard for black business owners," said Liu.
In 2018, big banks approved 29% of credit applications from African-American entrepreneurs, while approving funds for 60% of white business owner applicants, Brookings said in a mid-April study on COVID-19 and small businesses.
"There needs to be a more targeted effort to attack racial disparities," said Liu.
While Abbott said he wants to see structural changes, he remains upbeat and has seen his business pick up since a loosening of stay-at-home restrictions.
"I'd like to support other black-owned businesses, the same way they come and support me," he told Agence France-Presse. – Rappler.com