When Kareem Bunton first moved to New York City as a 23-year-old, he wasn’t able to open a bank account.
Despite having a job, a deposit and identification, major banks CitiBank and Bank of America kept denying him access, increasing the requirements every time he went in.
“I called home, like, ‘Dad, they’re not taking my money.’ And my dad said, ‘Of course not, they’re racist. They don’t want your money’.” It wasn’t until Bunton went to the smaller Dime Community Bank that he was able to get an account. He says even today, as the owner of popular Bushwick bar Bunton’s World Famous, he’s forced to jump through hoops with some business gatekeepers.
It’s just one example of how minorities are held back financially in America, and why female and minority-owned businesses are now being disproportionately affected by the pandemic, he said.
“It’s institutionalized racism, being denied access to money.”
In a recent national analysis, 41% of Black business owners reported not working between February and April, compared to 17% of White business owners. Plus, 32% of Latino-owned businesses, and 26% of Asian American-owned businesses closed in that period.
“It’s institutionalized racism, being denied access to money.”
Worse for some
In New York City, 85% of women and minority owned businesses (M/WBEs) recently surveyed by the Comptroller’s Office said they would be out of business in six months due to COVID-19.
In Brooklyn this would be particularly devastating — more than half of all Brooklyn businesses are owned by immigrants and nearly a third are minority-owned.
There are barriers to access when it comes to getting federal, city and private sector assistance, NYC Comptroller Scott Stringer said. For example, more than a quarter of M/WBEs surveyed didn’t get a cent from the federal Economic Injury Disaster Loan, and only a handful were approved for City loans and grants.
“These findings are alarming and underscore the structural inequities facing M/WBEs and the urgent need for immediate action and relief before M/WBEs in our city are decimated,” Stringer said.
On July 28 the City moved to correct the imbalance, with Mayor Bill de Blasio signing an executive order to improve women and minority-owned businesses’ chances of getting a City contract. The City said it will expand the pool of contracts subject to the M/WBE program.
Moving forward, a chief diversity officer would be appointed in all city agencies, all city agencies procuring COVID-19 response contracts must now consider at least one quote from a M/WBE.
Something has got to be done
Bunton’s World Famous was doing well in its second year of business, with bookings through August, before it was suddenly forced to close in March.
Bunton managed to secure a grant from the Small Business Association and a Paycheck Protection Program loan, saying he was lucky to have a partner with excellent finances. “By myself? Impossible. Never would have happened.”
While he’s been able to open his courtyard with outdoor dining, he’s operating at one-third capacity — not enough to cover the bills. And he can only rely on that until October at the latest, when the weather turns.
“Maybe if they did another round of PPP, give small businesses another $40,000 each? That, with some rent forgiveness, I might be able to make it until a vaccine comes out. Something has got to be done.”
At time of writing, there could be another round of PPP loans coming, however they’d be limited to businesses with 300 employees or less. They could also include a revenue test, limiting loans to businesses that have lost at least 50% of revenue compared to a previous year’s quarter.
To support Bunton’s and its staff, donate to this GoFundMe, or stop in to buy a beer and a t-shirt at 1005 Broadway.
Professional organizer and interior decorator Allison Dunn said there needed to be more support for certified M/WBEs from the City. “They push a lot for you to be certified, and then once you are the help you really need to be successful is not there,” she said.
While 65% of M/WBEs were willing to contract with the City on COVID-19 response efforts, only 10 businesses actually won them, the comptroller found. Dunn said it’s restrictively expensive and difficult to compete to win a City contract, especially without mentorship.
Her company Neat Rules was gearing up for its biggest season (spring cleaning) when the pandemic hit. Business has still not picked up the way she had hoped.
The Prospect Lefferts Garden-local applied for PPP relief and was not approved, being asked to provide more documents she didn’t have. “I don’t think they were trying to make it easy,” she said.
As a result, Dunn had to lay off staff. Recently she applied for an Economic Injury Disaster Loan, and was waiting to hear whether that was approved.
Seeing she needed to pivot to online, Dunn recently finished writing a children’s book with her son on teaching kids to stay organized. “For me, I have tried to stay positive and see what else I can be doing.”
One of the best things Brooklynites can do to help is shop local, Guacuco owner Leonardo Molina said. Guacuco is a Venezuelan family-owned bar and arepa joint with locations in Bushwick and Bed-Stuy.
The two-year-old Bed-Stuy business was forced to close for seven weeks when the pandemic hit.
Molina said he was lucky to get a much-needed PPP loan through the Brooklyn Cooperative bank. “I’ve applied for so many grants, and I’ve got zero so far.” While his landlord was flexible, it allowed him to pay the rent he was backed up on and start looking ahead.
Like Bunton, Molina said he was shut out of the major banks — Chase, CitiBank and Bank of America — when he was trying to get a business loan, despite having good credit. “But when I went to the Co-Op, that was a whole different deal.” He said the bank — which is on his street — looked at his business plan and gave him a loan when no one else would.
Right now, Guacuco is starting to see things pick up, in part thanks to outdoor dining, but is selling less than half of what it used to. When it rains, they do no business.
“I don’t want to close my doors, because I put a lot of work into the business, but if we don’t get extra help — federal or local — it’s going to look very rocky for us in the next months.”
To support Molina, stop in at Guacuco in Bed-Stuy or Bushwick and buy a beer or an arepa.
By the numbers:
- 53%: Brooklyn small businesses that say they’ll struggle to stay open over the next 3 months*
- 28%: Brooklyn small businesses that say they didn’t pay rent in July*
- 61%: Brooklyn small businesses that say their landlords didn’t offer rent relief*
- 43%: Brooklyn small businesses that report significantly less business since reopening*
- 26%: City-certified M/WBEs that got not relief from the EIDL**
- 55%: City-certified M/WBEs that got less than $50K relief from the PPP**
*Brooklyn Chamber of Commerce survey of 233 Brooklyn small businesses
** New York City Comptroller survey of more than 500 City-certified M/WBEs
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