Black-Owned Businesses Hit Hardest During Pandemic

From February to April, the number of active, Black small business owners dropped by almost half. In the next episode of Affirmative Action, we explore how Arkansas business owners are coping amid the pandemic.

Christopher Austin, owner of Catchin’ Fadez; Nicole Calhoun, owner of Elxr Yoga Lounge.
Christopher Austin, owner of Catchin’ Fadez; Nicole Calhoun, owner of Elxr Yoga Lounge.

Black-owned small businesses are taking a beating due to the pandemic. According to a report released in August by the Federal Reserve Bank of New York, the number of active small business owners fell by 22 percent from February to April, the largest drop on record. Black businesses experienced the largest decline with a 41 percent drop. White business owners only fell 17 percent.

The report lists a few reasons for the disparity. First, Black-owned firms are more likely to be located in COVID-19 hot spots. Second, Paycheck Protection Program loans only reached 20 percent of eligible businesses in states with the highest densities of Black-owned firms. In counties with the densest Black-owned business activity, coverage rates were typically lower than 20 percent. Third, weaker cash positions, weaker bank relationships and preexisting funding gaps left Black businesses with little cushion entering the crisis.

Over the summer, the death of George Floyd in police custody brought national attention to racism and police brutality. One response was a call to support Black businesses across the country. For example, in Arkansas, a group called Arkansas Forward launched a 44-day campaign on Juneteenth to support Black-owned restaurants.

While it may be especially needed right now, efforts to support Black businesses are not new. Black-Owned Northwest Arkansas has been highlighting businesses through its Instagram account since 2019.

The Arkansas Economic Development Commission has a Small, Minority and Women-Owned Business Division that has an online directory where you can search for Black-owned businesses around the state.

Man with a fresh hair cut and waves
Photo courtesy of Christopher Austin

Two Black Arkansans navigating this tough year as small businesses owners are Christopher Austin, owner of Catchin’ Fadez Barbershop in Jonesboro, and Nicole Calhoun, owner of Elxr Yoga Lounge in Fayetteville. Austin became a business owner to escape the violence that’s prevalent in his hometown.

“I had a choice whether I choose to do what I was brought up around or a different route,” Austin says. “And you know just seeing a lot of my friends from the age of nine or ten being killed, and from that same life I decided to take another route.”

Nicole Calhoun started practicing yoga to address chronic neck and back pain caused by car accidents.

She is now the owner of a hip-hop infused yoga studio that did see a little boost in support this summer following calls to support Black-owned businesses around the country.

Two women doing yoga poses
Photo courtesy of Nicole Calhoun

“I can’t say for sure that I noticed more traffic within the studio; I noticed a huge leap of support on our social media channels for the business and on my personal social media channels,” Calhoun says. “And in that aspect, if I had to be honest, I would say that I got more attention than the actual business did.”

Austin did not notice an uptick in support and says this year has been a struggle especially because barbershops and salons were forced to close their doors in the early days of the pandemic.

“And when it hit all of the barbershops and salons, it took a toll on us and still right now today is hard for us,” Austin says. “I think we still need assistance.”

In addition to the pandemic, both business owners deal with racism which Austin says is “alive and well” and out in the open in his town.

To hear more from this conversation, including examples of racism experienced by these business owners, as well as what they’re doing to help their businesses survive the pandemic, listen to the newest episode of Affirmative Action.

 

Antoinette Grajeda
Antoinette Grajeda

Antoinette Grajeda is an Arkansas-based journalist. She has covered race, culture, politics, health, education and the arts for NPR affiliates as well as print and digital publications since 2007.