Devastated by the pandemic, the restaurants of the afro-americans benefit from a surge of solidarity

Dévastés par la pandémie, les restaurants afro-américains bénéficient d’un élan de solidarité

A long queue forms in recent days in front of the glacier Southwest Soda Pop Shop in Washington. It enjoys a strong movement of solidarity with the restaurants run by black Americans, devastated by the pandemic of sars coronavirus.

“We went from 30 clients per week to more than 300. This is crazy. They come shine or rain (…) They support us against the whole world”, was struck by Andrea Jones, the daughter of the owner of the Southwest’s Soda Pop Shop.

Located on the docks near the Potomac river, the glacier, which had had to close because of the sars coronavirus, was in great “financial distress” until the young black woman of 21 years seeking help on Twitter, on the eve of a huge anti-racist demonstration in the capital. His message is relayed nearly 30 000 times.

The media initiatives, activists and business to support the restaurant owners to afro-americans conducted in recent weeks in the wake of the historic movement against the racism faced by the United States since the death of George Floyd, middle-aged black, unarmed and killed by a white policeman on the 25th of may.

Uber Eats has notably launched on June 4, a filter to promote the restaurants owners black americans in several cities in the United States and Canada, while removing the costs of delivery for these shops.

Almost ruined

Many studies have shown that entrepreneurs of african-americans, particularly in the services sector such as catering, have most severely suffered from the economic crisis and health caused by the Covid-19.

“Oh my god, we have almost been ruined. (…) We have lost all sources of income that it was possible to lose,” says moved, Oji Abbott, owner of restaurant soul food Oohh’s and Aahh’s in Washington.

Located on U Street near the prestigious university black Howard University, the institution has seen the flow of tourists and students would dry up overnight. Its activities catering stopping too abruptly.

The mecca of the black community in Washington, the restaurant Ben’s Chili Bowl, which has counted Martin Luther King as one of its regulars, has seen a collapse of more than 80% of its turnover during the confinement.

“The businesses of black Americans tend to be smaller and to have profit margins thinner. They have credit constraints are larger and are therefore more vulnerable in the event of a recession,” says Sifan Liu, analyst at the centre for research Brookings, Washington.

Between February and April 2020, 41% of SMES created by African-Americans in the United States have disappeared because of the coronavirus, according to a study by the National Bureau of Economic Research published in June. Over the same period, only 17% of SMES started by entrepreneurs whites have fallen off.

Access to capital difficult

Like many entrepreneurs of color, the patrons of Ben’s Chili Bowl and Oohh’s and Aahh’s were excluded from the first wave of loans from the assistance program for SMES of the administration Trump launched at the beginning of April, a life-saving assistance to bounce back.

Initially, “the program is based on the key financial institutions to distribute the loans, which has led to the existing customers of the major banks. As black entrepreneurs are often not financed by banks or under-funded, they did not have this type of pre-existing relationships, and less chance of obtaining these credits,” details Sifan Liu.

Nicknamed “Chef O”, Mr. Abbott founded his restaurant in 2003 with 30 000 dollars of savings. There has never been a call for a bank to expand his business.

“Access to capital in general is difficult for black entrepreneurs,” recalls Sifan Liu.

In 2018, the big banks have not approved that 29% of the loan applications of entrepreneurs for african-americans, but 60% of loan applications from entrepreneurs white, says the think-tank Brookings institute in a study on the Covid-19 and SMES, published in mid-April.

“There must be targeted measures to tackle racial inequalities, otherwise it is certain that (black entrepreneurs) are going to suffer even more,” concludes Sifan Liu.

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