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Through this series, we examine the disproportionate financial toll of COVID-19 on Black and Latino communities, including how it has affected individuals, families and businesses.

Charlotte Black Businesses In Peril

BBOC Website
Cathay Dawkins (on left), founder of Black Businesses of Charlotte.

The pandemic is hitting black-owned businesses hard with them being twice as likely to close when compared to white businesses, a Federal Reserve Bank report found. Black-owned restaurants are especially hard hit, given the restrictions on capacity during the coronavirus.

In Charlotte, Cathay Dawkins, co-founder of Black Businesses of Charlotte, says Black Restaurant Week actually held for two weeks last month, helped to bring in customers to restaurants that were not doing a lot of business. He says revenue for them increased by 25% during the event. But still, Dawkins says many Black restaurants are struggling, with some expected to close in coming months.

Cathay Dawkins: There is like a 25 to 35% closure of the restaurants that we knew that were open. Black-owned restaurants that had already closed their doors or had temporarily closed.

Gwendolyn Glenn: What are some of the reasons they are closing? Are they not getting the PPP (Paycheck Protection Program) loans or what are they telling you why they're closing their doors.

Dawkins: From March to May, we saw that it was hard for them to get workers. And so they had to figure out how can we sustain workers? And a majority did not get approved for PPP loans. The larger restaurants, the ones that are located uptown and the ones that have been established for more than three to four years, they were getting the PPP loans. But the smaller ones, the ones that are just recently open and within a year or two were not getting approved. They were closing at a higher rate than the rest of them. So we're really concerned about the restaurants that are newly open and the ones that don't have a name for themselves and the community.

Glenn: And what were the reasons for the ones that did not get approved for those loans? Why were they being turned down?

Dawkins: Some was related to taxation, meaning they still had not filed their taxes for 2019 and that was a big requirement. And so we were trying to help as many as possible fill out information and do it accurately. But even the ones that did have the things together and they did have a bank account, they did have their taxes done. We still see a low approval rate. So only about 7 to 10% of the of those that we talked to were actually approved.

Glenn: Well, let me ask you this. Forbes magazine had an article where they just simply put a lot of these loans being turned down to institutional racism. Do you see that as a factor?

Dawkins: Yes. And even though I was saying some of the technical errors, whenever you apply for a loan in general, they want to know where you're located. And so one of the biggest things is if you're not located in a high, white foot traffic area they clump you in a different pile. And so if you're not located in those areas and they feel like, "OK, we're definitely going to get our money back. It's going to be high foot traffic, it's a white area, it's safe." Any restaurants outside of those zones is almost like redlining, but in a different way. If you're not located in those areas, you're less likely to get a loan. And so 75% Black businesses that apply do not get approval for most of the larger banks.

Glenn: What would you say they need at this point to stay open? We talked about the loans, but what else do they need to help them stay open?

Dawkins: Based on everything that we've seen. There needs to be some type of grant that is between $1,000 and $5,000 that is given to these businesses so that they can just make it through right now and then they can prepare for the long term. But right now they need to be stimulated so that they could survive just right now. Because a lot of them are not going to make it past December 31.

Glenn: And do you have a number in terms of how many are out there and how many have failed or closed.

Dawkins: As far as Black businesses?

Glenn: Yes.

Dawkins: There are about 65 Black-owned restaurants and specialty shops that we have on our list. And we already saw that 17 were closed. That number could go up to 50% based on those that we've spoken to. Fifty to 75% of Black businesses in Charlotte, North Carolina area either are 50% below their normal revenue for the year, are borderline about to go into the red. And they're going to have to make their decision in the spring if they can afford to make it through another year.

Gwendolyn is an award-winning journalist who has covered a broad range of stories on the local and national levels. Her experience includes producing on-air reports for National Public Radio and she worked full-time as a producer for NPR’s All Things Considered news program for five years. She worked for several years as an on-air contract reporter for CNN in Atlanta and worked in print as a reporter for the Baltimore Sun Media Group, The Washington Post and covered Congress and various federal agencies for the Daily Environment Report and Real Estate Finance Today. Glenn has won awards for her reports from the Maryland-DC-Delaware Press Association, SNA and the first-place radio award from the National Association of Black Journalists.