Small businesses face challenges
A recent study from MassINC Polling Group shows that a third of small businesses in Massachusetts aren’t able to fully reopen, and Black-owned businesses continue to struggle to recover from the COVID-19 pandemic.
MassINC, a nonpartisan research firm based in Boston, surveyed 1,868 small-business owners in seven different languages to get a clearer picture of small businesses’ needs during the crisis. They held a webinar Thursday to reveal the results of the survey.
Black small business owners in Boston were most likely to report that they missed a payment on rent or other expenses, and small businesses owners of all races located in Boston proper were more likely to report missed payments than those in other parts of Massachusetts.
Black and Latinx small-business owners were also more likely to not have applied for the Paycheck Protection Program (PPP) loans, while white and Asian small business owners applied at a rate of about 70%. While many small businesses did receive PPP loans (overall, 78% of small businesses received the full amount they needed), Black and Latinx businesses were slightly less likely to receive the full amount.
Dr. Tracy Corley, a fellow at MassINC, says that this may cause Black small businesses to have a harder time recovering in the future.
“If we do not do more to get some sort of relief in the coming years, they will find themselves over the wall trying to make their mortgage payments, or face creditors seeking their personal assets,” Corley said during the webinar. “Given the lower rates at which Black and brown people own property, and other drastically lower wealth, this means that the wealth gap will widen even more – a pretty high chasm between the haves and have-nots, especially in cities with lower levels of income and property values,” she said.
The smaller the business is, the more trouble it may have, the survey reveals. Many businesses that made $24,000 or less in 2019 report that they have no bank account or no insurance. Less than 40% of the smallest businesses — many of which only have one or two employees — applied for PPP loans. And as employees stay home waiting for businesses to reopen, many of their employers are having trouble convincing them to come back to work. The smallest companies cite fear of being infected as the main reason why, while larger small businesses are seeing their employees making more on unemployment. Another significant deterrent is the lack of child care since the pandemic started.
Corley said the survival of small businesses is key to a desirable quality of life in regions across the state.
“Despite the downturn, we must continue to invest in our region and our state,” Corley said. “In the end, if small businesses cannot thrive to create places that people want to live, [larger] companies will relocate to places with better amenities for retaining and attracting employees, and with better infrastructure for getting workers where they need to go without congestion, pollution and frequent system breakdowns.”