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by Catherine Wilson, staff writer

When Covid-19 hit back in March, non-essential businesses were forced to close their doors to limit the spread of the virus plunging many businesses into financial decay. Those affected most by the financial strain of the virus were those of small minority-owned businesses.

For Danny and Shareese Strong, owners of Strong Health and Fitness in Waldorf, MD, the closure of business in uncertain times meant the loss of membership. The Strong’s also specialize in personal training, which had to grind to a halt during the closure.

“If you’re not able to facilitate your training, then you’re unable to get paid for the training, and personal training makes up a good portion of our business,” Strong said.

In response to the financial crisis ravaging the country, President Donald J. Trump approved a $2 trillion financial aid package in the form of the CARES Act in late March. The package included stimulus checks, an increase in unemployment benefits, and the Paycheck Protection Program(PPP) aimed at providing financial aid for small businesses.

“We have been operating from mainly savings but we are hoping to tap into some sort of financial aid, but you get all this information about what to do when they are asking for so much [paperwork],” Strong said.

After applying for the small business loan, the Strong’s never heard anything back and neither did entrepreneur and owner of Clarity Coffee House, Marilyn Weimer. Weimer applied as soon they began accepting applications and she never heard back on her initial application.  

After the first round of PPP was approved by various bank lenders in April, over 1.5 million loans were granted— over 26,000 in Maryland.

Image courtesy of Clarity Coffee House

The effectiveness of the program was challenged after SBA findings showed that lenders didn’t prioritize small businesses, especially minority-owned businesses that needed the funds most. It was also reported that the PPP meant for small businesses was awarded to several big businesses including restaurant chains like Ruth’s Chris Steak House and Shake Shack.

The oversights caused the SBA to change its policy, which included loan forgiveness. The changes helped Weimer, whose status of being a black woman veteran got the lenders to take a second look.

In addition, Weimer and her husband were able to secure a local small business grant from Charles County and was invited to serve on the county’s Covid-19 small business recovery task force.

Even with some of the changes, local small businesses still managed to slip through the cracks because they weren’t far enough along in the establishment of their business to qualify for financial aid.

Lori Wheeler used her personal finances to open Bodi Oasis, a wellness spa and salon located in Bryans Road, MD in January, right before Covid-19 hit. In the business’ infancy, Wheeler was still in the process of hiring staff when she had to close and couldn’t meet the requirements to qualify for PPP.

“The circumstances would be different had we already been established for a few years,” Wheeler said.

Despite not being able to get a loan through PPP, Wheeler was awarded a small payment through another program that helped pay half a month’s worth of business expenses.

“It’s going to be a very rough journey to fully recover and rebound because I am recovering from the ground,” Wheeler said.

Wheeler, the Strong’s and Weimer began their businesses using their personal savings— a common trend among black entrepreneurs.

In 2014 the Federal Reserve showed that over half of black firms are turned down for business financing compared to nearly 25% of white firms that are turned down for business loans.

“I don’t have that confidence to go in and get a loan,” Weimer said.

Even with Weimer’s outstanding credit, business portfolio, and perfect history of business and payments, banks have still refused to refinance. While not directly attributing it to racism, Weimer can’t see a business risk that the bank is taking to fulfill her request.

“No matter how we try to think about it, people see your outsides first before they see your insides,” Weimer said speaking to the challenges of being a black business owner.

With the lack of financing options and aid for black-owned small businesses, many are struggling to find a way to pay for the additional expenses required for Covid-19 to remain open while taking in less income.

For the Strong’s at Strong Fitness, that means cutting back hours of operation and allowing fewer people through their doors. While maintaining their already rigorous cleaning standards, they also had to pay for an expensive cleaning of the facility and increase of sanitization to ensure the safety of staff and patrons— all from their own pockets.

By the end of June, the U.S. Small Business Administration announced it had approved over 4.5 million loans under PPP with nearly 80,000 loans going to businesses in Maryland. Applications for PPP have been extended until August 8 and a list of large publicly funded businesses is set to be released by the SBA and the Treasury in the coming days.