Joy King runs a dining bus tour of local restaurants in downtown Birmingham. For $90, riders are taken from meal to meal with the local comedian and TV show host. But since the pandemic, King’s business has dried up.
“It stopped everything. My TV show stopped. The buses stopped. I did no comedy. My world literally came to a complete screeching halt.”
King relies on a loan to finance her buses, and her second deferment is coming to an end. She says without a third deferment, she will lose a bus.
“At that point I’d say (to the bank), ‘Hey, enjoy your nice bus,’ cause what I can’t do is be homeless in the process.”
Many small businesses are struggling during the pandemic, but nationwide, 41 percent of Black-owned businesses have closed during COVID-19. That’s more than double the percentage of white-owned ones that closed, according to a report by the National Bureau of Economic Research.
“We know they’ve been battered. They’ve been bruised,” said Mobile Area Black Chamber of Commerce Chairman Leavie D. King III.
King says a survey from members showed about 20 percent closed their doors in Mobile. The federal Bureau of Labor Statistics and the Census Bureau do not keep state-level data on Black-owned business closures.
“Between the government shutdown orders and high unemployment rates, we know small businesses have felt this pain especially hard,” said King.
He says that many Black-owned businesses in Mobile report they are struggling financially in COVID-19 hotspots. In general, African Americans have had worse health outcomes from the disease and worse economic outcomes from the efforts to contain the spread.
In part, that’s because Black-owned businesses are in a weaker position to weather disaster, experts say. They tend to start out with less capital and have fewer relationships with lenders.
“While the entrepreneurial spirit among African Americans and other minorities is high, when you have a lack of wealth, you’re starting a business that already is cash strapped and in many cases in danger,” said Robert Dickerson, executive director of the Birmingham Business Resource Center.
Black entrepreneurs are more likely to enter the service industry or to start businesses that don’t require relatively large investments, like hair salons. Unfortunately, these low-cost startups are hardest hit by COVID-19, said Dickerson.
“Trying to forge a relationship with a lender in a time of crisis is difficult,” he said.
Antonio Boswell owns a photography and video studio in Birmingham. He shoots corporate events and helps small businesses market themselves. When the pandemic hit, all of his income disappeared.
“There was almost nothing I could do,” he said. “I had to sit down and decide if I was going to remain in the industry.”
Boswell is considering whether he can afford to keep his photography studio space as his work slowly picks back up.
“I have no idea what is going to come. Who knows what could happen two or three months down the road,” he said.
“I try to remain positive. I try to remain faithful, but honestly this is something new for the world.”
Boswell got federal funding to help him survive the shutdown, but many Black-owned businesses have been shut out from PPP lending during COVID-19, according to limited federal data and surveys.
A study that sent black and white testers to seek help from lenders early in the pandemic found that bankers were more likely to encourage white business owners to apply.
Part of the problem, Alabama’s Black business leaders say, is many small, Black-owned businesses are not set up to qualify for federal help in an emergency. Boswell says this is a norm in the Black community.
“Businesses in my neighborhood may not have been a legit business,” he said. “I’m not saying there’s anything wrong with it,” he said, adding that such informal structures, lacking all the proper paperwork, have made it hard for some entrepreneurs he knows to get help.
King, from the Mobile chamber, says part of his mission is educating Black entrepreneurs about how to legitimately establish a business. He says often Black business owners have no business license, tax ID, or formal payroll processes, all necessary to apply for PPP loans.
“I think what people learned is they need their proper documentation in case this ever happens again,” said King.
Because PPP loan programs did not track the demographics of who received the loans, it is difficult to get accurate numbers on how the funds were distributed, experts say.
King believes the loss of some businesses will be permanent. That will mean higher poverty and less representation in Mobile.
“The less number of African American-owned businesses we have, the less people we have sitting at the seat, making decisions,” he said, adding that he wants Black youth to see examples of what is possible in their neighborhoods.
Still, some Black entrepreneurs have seen opportunity in this moment of flux.
Dickerson points to Eugene’s Hot Chicken, a restaurant that opened in Birmingham after the pandemic began.
“There is a resilience there among Black people, in general, who have always been economically deprived,” said Dickerson.
“There are a lot of folks that are hurting, but there are other people who can weather the storm because they have been good managers, made good decisions, (and) put themselves in a position to even expand during a bad time.”
Joy King, who leads the restaurant tour, says she’s picking up comedy gigs online to supplement her income as she resumes her food tour with fewer diners on each bus.
“I’m learning to hold on to all of my gifts and talents,” she said.
Lemar Storey
Lemar Storey, a massage therapist and owner of Life Touch Massage in Birmingham, says he’s seeing a growing demand for massage as his clients navigate the stress of the pandemic and want to focus on their health.
“People are looking for a healthy escape,” he said. “When we reopened, that allowed them to say 'now I can finally get back to receiving a massage to destress instead of drinking a glass of wine every day.”
Storey says while most massage patrons nationwide are white women, his customers are predominantly African American. They say they feel more comfortable coming to him.
“We’ve been really consistent,” he said, adding that a PPP loan he got gave him the confidence to re-open his shop after being closed for two months.
“For someone who has been working since I was 15 and then was locked in the house for two months, not being able to work, I was going through mental depression myself. I had to find a way out of it.”