As he seeks to do business in a COVID-19 hotspot, Detroit restaurant owner Ron Bartell tries to stay upbeat, despite concerns about the long-term future of his popular eatery.
“We don’t run from any challenges; we run to them,” he said.
That’s something the former cornerback who played for nine National Football League seasons knows something about. Now he leads Kuzzo’s Chicken & Waffles located on the city’s northwest side.
“But we don’t know what the long term holds for us,” Bartell added. “We’re making do like everybody else. We’re struggling like everybody else.”
Designed to curb the spread of the coronavirus, Gov. Gretchen Whitmer in March issued a set of emergency orders that only allowed bars and restaurants to provide carry-out or delivery services. Essential retail like grocery stores have remained open, but businesses such as barbershops and beauty salons were ordered closed.
However, Whitmer on Monday announced a phase-in plan that allows bars and restaurants in portions of the state to reopen in time for Memorial Day weekend. The opening requires limited customer capacity and mandates that servers wear face covering. The area selected includes the Upper Peninsula and northernmost part of the Lower Peninsula, which have not been hit as hard by COVID-19.
Retail stores across the state can open by appointment on Tuesday. Detroit Mayor Mike Duggan this week urged restaurant owners to start looking at outdoor seating options in preparation to reopen in the future while meeting health guidelines for reduced capacity.
Bartell, who’s African American, operates a business in a community that has been one of the hardest hit by COVID-19. Almost 54,000 Michigan residents have contracted COVID-19 since March 1 and 5,158 people have died from the virus as of Friday.
The city’s population is 80% Black and has a sizable Latino community. He resides in a state where African Americans compose 31% of Michigan’s COVID-19 cases and 40% of its coronavirus deaths. Yet Blacks make up only 14% of the state’s population.
Bartell has secured a federal Small Business Administration Paycheck Protection Program (PPP) loan to help his restaurant stay afloat during the crisis, but has yet to hear about the Economic Injury Disaster Loan application that he filed.
He’s not alone. A recent national survey showed Black and Brown small business owners fear that their shops will not survive without more government assistance. The online survey was conducted by Global Strategy Group for Color of Change and UnidosUS between April 30 and May 12.
After two rounds of federal funds offered through the PPP, 45% of Black and Latino small business owners whose establishments are still open reported they will have to shut their doors by the end of the year, if not sooner.
Survey respondents cited several barriers to PPP accessibility. Of those who decided not to apply, respondents cited an application process that was too difficult to complete (14%); concern that they were ineligible for the programs (32%); and belief that they would not be approved (26%).
Highlights of the survey include:
- Slightly more than 1 in 5 African-American small business owners and just over 1 in 10 Latino small business owners report temporarily closing due to the COVID-19 crisis.
- A majority (51%) of Black and Latino small business owners who sought assistance requested less than $20,000 in temporary funding from the federal government.
- About 1 in 10 (12%) Black and Latino small business owners received the federal assistance they requested.
- Almost half (41%) report they have either received no assistance, or are still waiting to hear whether they will receive any federal help (21%).
- Almost three-quarters (73%) of Black and Latino business owners disapprove of the job President Donald Trump is doing handling the crisis.
“The Small Business Administration’s Paycheck Protection Program is a driver of racial inequality, rather than a means to provide desperately needed relief for the small businesses at the heart of Black and Brown communities,” said Rashad Robinson, Color Of Change president.
“Corporate banks must be held accountable for the way they spend taxpayer money; we cannot let them off the hook for rampant discrimination, especially in this moment of economic crisis. Congress must act to ensure tracking and oversight of who is getting the money and who is being denied, and ensure that the American public is not subsidizing another bailout for reckless and self-interested corporations.”
While the federal CARES Act, which created the PPP program, receives support from 91% of all Black and Hispanic small-business owners, it is largely seen as a first, but wholly incomplete, step toward economic recovery.
Survey respondents believe that the stimulus was passed primarily to protect major corporations’ best interests (82%), with too many handouts to big corporations (74%) and too little funds for small businesses (71%).
“This is simply unacceptable,” said Janet Murguía, UnidosUS CEO and president. “The next stimulus and relief package must have targeted help to minority-owned businesses and nonprofits so we can save these vital enterprises.”
Small businesses located in African-American and Latino communities are less profitable, and have less liquidity than comparable establishments in white neighborhoods, according to a 2019 JPMorgan Chase Institute report. In all majority Black or Latino communities, most small businesses had fewer than 21 days of cash reserves.
All things considered, Bartell also is critical of the feds’ remedy to help small business during the coronavirus pandemic.
“I think that they missed the mark on that,” said Bartell, who opened the popular restaurant in 2015. “I think that there should have been some kind of bailout package specifically designed for small businesses in mind.”
Stephanie Byrd is a second-generation African-American business owner in the Motor City. While her two businesses, The Block and Flood’s Bar & Grille, have secured PPP loans, she points out that the funds will only help her in the short term.
“As of right now, we are not open for business, but this will help us to reopen in the next few weeks, whether that is carry out or serving a limited capacity [dine in],” Byrd said. “We need funds just to help us ramp up.”
However, the future is uncertain, Byrd said. She doesn’t know how her businesses will cope with restrictions to operate at something less than full capacity.
“Our business model is not made for that,” Byrd said. “I don’t think most businesses are.”