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For black-owned businesses, coronavirus is latest funding challenge

04/30/2020 - Atlanta, Georgia - Just Add Honey Tea Company owners Brandi and Jermail Shelton stand for a photo at their shop, located at 684 John Wesley Dobbs Avenue, in Atlanta’s Old Fourth Ward neighborhood, Thursday, April 30, 2020. They have switched their focus to online orders during the COVID-19 pandemic. (ALYSSA POINTER / ALYSSA.POINTER@AJC.COM)
04/30/2020 - Atlanta, Georgia - Just Add Honey Tea Company owners Brandi and Jermail Shelton stand for a photo at their shop, located at 684 John Wesley Dobbs Avenue, in Atlanta’s Old Fourth Ward neighborhood, Thursday, April 30, 2020. They have switched their focus to online orders during the COVID-19 pandemic. (ALYSSA POINTER / ALYSSA.POINTER@AJC.COM)

Studies show white owners have easier access to banks, capital

This was going to be the breakthrough year for Jermail and Brandi Shelton and their burgeoning Just Add Honey Tea Company empire.

The couple was raking in revenue from national wholesale sales, farmers markets, tea parties, their websites and two tea shops serving rooibos and chamomile to Georgia State University students, Grady health care workers and tourists along the Atlanta Beltline.

But the coronavirus brought shelter in place orders and a plunge in sales.

“Everything is zero, except for the website,” said Brandi. “It hurts.”

Like many other small businesses, despite their losses, they are not eager to reopen their shops at the Sweet Auburn Avenue Curb Market and the Beltline until the pandemic is under control, even as Gov. Brian Kemp pushes for the economy to return to normal.

There is an old saying in the black community: “When white folks catch a cold, black folks get pneumonia.”

A masked customer waits for her food order while standing in line at the Slutty Vegan ATL restaurant, located at 1542 Ralph David Abernathy Boulevard SW, in Atlanta's Westview community, Thursday, April 30, 2020. (ALYSSA POINTER / ALYSSA.POINTER@AJC.COM)
A masked customer waits for her food order while standing in line at the Slutty Vegan ATL restaurant, located at 1542 Ralph David Abernathy Boulevard SW, in Atlanta's Westview community, Thursday, April 30, 2020. (ALYSSA POINTER / ALYSSA.POINTER@AJC.COM)

COVID-19, which has hit black communities at disproportionately higher rates, seems to validate that aphorism — also when it comes to business.

Minority-owned businesses historically have had less access to capital, putting them at a disadvantage as the economy began shutting down in March. Small businesses with black owners were half as likely to obtain bank funds as whites, according to a Federal Reserve survey published earlier this year. A 2016 Stanford study found white business owners seven times more likely to secure loans in their first year of operation than black businesses.

Congress has authorized $660 billion in federal emergency loans to small businesses through the Paycheck Protection Program, or PPP. The second round of funding, administered by the Small Business Administration, includes $60 billion for minority businesses after many struggled to secure loans the first go-around.

The SBA has not shared loan disbursements by race and it’s too early to tell how much the program will help. Some black-owned businesses in metro Atlanta have secured federal loans, but other cash-strapped owners are still waiting.

Phnewfula Frederiksen, owner of Happy Mango, a pregnancy, baby and kid’s boutique in Kirkwood, got a small PPP loan about two weeks ago enabling her to pay her four employees full hours.

But because her employees are mothers and most of her clients are soon-to-be mothers, whom she doesn’t want to put at risk, she has temporarily converted her whole operation to online sales.

Phnewfula Frederiksen, owner of Happy Mango, the only black-owned baby shop in Atlanta. SInce closing during the coronavirus pandemic, she has intensified her online sales operations. “This forces you to be innovative,” she said
Phnewfula Frederiksen, owner of Happy Mango, the only black-owned baby shop in Atlanta. SInce closing during the coronavirus pandemic, she has intensified her online sales operations. “This forces you to be innovative,” she said

“Business is down about 60%, but I am able to keep afloat,” said Frederiksen, who will also reopen by appointment only and on the weekends. “There is still a need for a car seat, crib, or stroller. ”

Henry M. Carter is still waiting to hear back about his PPP application. The owner of King Henry’s Turkey Legs and Things in Decatur says he has lost more than $60,000 and is paying staff out of his savings. In the week before he reduced his days to just Friday and Saturday, a total of five people came to his restaurant.

“If something doesn’t come through real soon, we might have to shut down and regroup,” said Carter, who just opened in January.

Frederiksen said the pandemic has forced black-owned companies to “get innovative,” and has been hosting virtual shopping events for her customers.

Many black-owned businesses that are in better shape are stepping in to try to help others.

Lakeysha Hallmon, founder of The Village Market, is providing pro-bono small business development services and counseling to about 40 businesses a week. Hallmon has accountants and attorneys navigating small businesses through federal paperwork and has connected them with banks and lending agencies. She says she has helped create about 50 new websites for black vendors to help them sell their products online, providing more than $50,000 worth of services for free.

04/30/2020 - Atlanta, Georgia - Village Market ATL CEO Lakeysha Hallmon stands for a photo in Atlanta’s Westview community, Thursday, April 30, 2020. (ALYSSA POINTER / ALYSSA.POINTER@AJC.COM)
04/30/2020 - Atlanta, Georgia - Village Market ATL CEO Lakeysha Hallmon stands for a photo in Atlanta’s Westview community, Thursday, April 30, 2020. (ALYSSA POINTER / ALYSSA.POINTER@AJC.COM)

“Black people support black people and it is important that those of us with a voice start showing what we should be doing,” Hallmon said.

Kisha Cameron, whose Subway franchise in southwest Atlanta has suffered about a 70% loss in revenue, got a PPP loan through Citizens Trust Bank. The Atlanta-based bank, founded in 1921 by five black businessmen, is one of the largest financial institutions in the country owned by African Americans.

Cameron said she will use part of the money to rehire some of her employees, mostly high school students from Westlake High School. Even with limited hours and sometimes working the store alone, she said she opened it up to allow students to use her computers while giving away food that she wasn’t going to sell.

Pinky Cole, owner of The Slutty Vegan, where lines famously stretch down a city block for her vegan burgers, briefly closed down for about two weeks even though it has always been a takeout restaurant. She has since reopened and lines are long again.

04/30/2020 - Atlanta, Georgia - Slutty Vegan ATL CEO and Founder Pinky Cole stands for a portrait outside of her restaurant, located at 1542 Ralph David Abernathy Boulevard SW, in Atlanta’s Westview community, Thursday, April 30, 2020. (ALYSSA POINTER / ALYSSA.POINTER@AJC.COM)
04/30/2020 - Atlanta, Georgia - Slutty Vegan ATL CEO and Founder Pinky Cole stands for a portrait outside of her restaurant, located at 1542 Ralph David Abernathy Boulevard SW, in Atlanta’s Westview community, Thursday, April 30, 2020. (ALYSSA POINTER / ALYSSA.POINTER@AJC.COM)

Through her Pinky Cole Foundation, the Clark Atlanta University graduate says she has paid for college students to return home, donated 300 burgers to area health care workers, and will soon donate hundreds more to essential workers.

Perhaps most importantly, she has spent about $5,000 paying the rents of some of her neighbors. Every business on her block of the Westview neighborhood in the West End is black-owned.

“Small and black and brown businesses are at the bottom of the totem pole,” Cole said. “Most small businesses have enough to survive for about two weeks and don’t get the same opportunities to grow.”

04/30/2020 - Atlanta, Georgia - Some individuals wear masks as they wait in line for their lunch orders outside of the Slutty Vegan ATL restaurant, located at 1542 Ralph David Abernathy Boulevard SW, in Atlanta’s Westview community, Thursday, April 30, 2020. (ALYSSA POINTER / ALYSSA.POINTER@AJC.COM)
04/30/2020 - Atlanta, Georgia - Some individuals wear masks as they wait in line for their lunch orders outside of the Slutty Vegan ATL restaurant, located at 1542 Ralph David Abernathy Boulevard SW, in Atlanta’s Westview community, Thursday, April 30, 2020. (ALYSSA POINTER / ALYSSA.POINTER@AJC.COM)

Many other black-owned businesses are trying to make the math work.

Just days before the pandemic shut down the country, Amanda Williamson was set to open a Buckhead flagship store, for her fashion brand, Ennyluap, after closing her other location in Cumming. She has lost nearly 30% of her revenue and her overseas shipping has all but ceased. Whenever her landlord reopens, she estimates it will still take her at least 45 additional days to design and open her shop.

Amanda Williamson outside of her former store in Cumming. Just before the pandemic hit, she was set to open a location of her Ennyluap in Buckhead.
Amanda Williamson outside of her former store in Cumming. Just before the pandemic hit, she was set to open a location of her Ennyluap in Buckhead.

“I don’t feel comfortable having employees working in a store right now. I would much rather wait a few more months,” said Williamson, who is also waiting to hear back about an SBA loan she applied for during the first round of funding.

Meanwhile, the designer, who has had shows at New York Fashion Week, has shifted to making chic, but functional, masks.

At Just Add Honey Tea Company, the owners go to their shuttered shop every day to fill online orders and host virtual classes on tea-drinking culture. Recently they gave each one of their nine furloughed workers $49 with the promise that they spend it at a local small business.

Just Add Honey Tea Company co-owner Brandi Shelton goes through an online order at the shop, located at 684 John Wesley Dobbs Avenue, in Atlanta's Old Fourth Ward neighborhood, Thursday, April 30, 2020. They have switched their focus to online orders during the COVID-19 pandemic. (ALYSSA POINTER / ALYSSA.POINTER@AJC.COM)
Just Add Honey Tea Company co-owner Brandi Shelton goes through an online order at the shop, located at 684 John Wesley Dobbs Avenue, in Atlanta's Old Fourth Ward neighborhood, Thursday, April 30, 2020. They have switched their focus to online orders during the COVID-19 pandemic. (ALYSSA POINTER / ALYSSA.POINTER@AJC.COM)

The couple applied for a PPP loan during the first round of funding but hasn’t heard back.

Brandi, one of the owners, says the uncertainty around the pandemic is weighing on her.

“How bad will it hurt when we pull the band-aid off?” she said.