More than half (59%) of local Black-owned businesses have experienced a large negative effect from COVID-19, compared with just 38% nationally—a 55% greater impact on Black-owned businesses, according to a new analysis from the Baton Rouge Area Chamber.
After pledging in June to address racial disparities in the Capital Region, BRAC surveyed Black-owned businesses in the metro area to determine how they have been impacted by the pandemic. The survey was designed to reflect questions in a national survey by the U.S. Census Bureau that included businesses owned by those of all demographic backgrounds. The findings were then benchmarked against the national data. The results indicate that Black-owned businesses in the Baton Rouge area have faced hardships that the average U.S. business has not, and that many are facing an existential crisis unless the economy soon recovers, or other assistance is found, BRAC reports.
While 13% of businesses nationally felt no effect at all, the same is true of only 2% of the Black-owned businesses here. Black-owned businesses in the Capital Region have also experienced much greater supply chain disruption than the average business nationally. While 58% of the local Black-owned businesses surveyed experienced supply chain disruption, only 32% of businesses did nationally.
BRAC Senior Director of Business Intelligence Andrew Fitzgerald writes in the analysis that the most troubling finding from the survey concerns cash on hand, which is critical for survival of the economic upheaval caused by the pandemic. While 27% of national respondents said they could survive three months or more with the amount of cash they have on hand—and 57% say they could survive a month or more—Black-owned businesses in the Capital Region fare much worse, reporting those numbers at just 4% and 25%, respectively.
According to BRAC, policymakers and business associations looking to support Black businesses should seek ways to address the findings from the survey. Some key actions include:
- Ensuring Black-owned businesses apply for grants or low-interest loans available from the state or federal governments to help weather this storm.
- Designing intentional outreach to help Black-owned firms receive recovery information in times of crisis
- Increasing the reach of high-quality small business development organizations.