(glove snaps)
(phone rings)
- Thanks for calling Mahogany Books.
How can I help you?
- [Jason] For Mahogany Books in Southeast Washington DC,
this is what business unusual looks like.
Orders taken by phone.
- Yes ma'am.
- [Jason] Books sanitized before being hand-delivered
to customers parked out front.
- Oh, thank you so much.
- [Jason] Derrick and Ramunda Young
quit their full-time jobs years ago
to pursue their dream, creating Mahogany Books,
a home for readers seeking literature
on the African American experience.
- The biggest premise was how do we make
black books accessible no matter where you live.
I'm from Oklahoma, proud to be from Oklahoma,
but I didn't have that type of access to black books.
- [Jason] When they founded Mahogany Books 13 years ago,
it was an online bookstore.
Nearly three years ago, they opened this,
their brick and mortar business.
The Youngs say that it quickly grew
to account for 75% of their revenue.
Then coronavirus hit.
- Everything had stopped and we had to shut our doors.
It was a little scary in the very beginning
because this was our bread and butter.
- [Jason] African American small business owners
have been disproportionately affected by the pandemic.
Because the Youngs had already built their online business,
they didn't have to shut down entirely,
but nationwide, from February to April of this year,
the number of active African American
small business owners dropped 41%
compared to 22% of all active small business owners.
- We have to be wise.
We still have to look at funding
that comes in different areas
because now, with doors closed,
less traffic is coming in our space.
- [Jason] When the Federal Paycheck Protection Program,
or PPP, passed as part of the CARES Act in late March.
- The motion is adopted.
(politicians cheer) (gavel pounds)
- [Jason] The Youngs applied to the program
through their bank.
- Before I was able to figure it out,
the first allotment of money had already run out.
It takes a little bit more
for, I think, genuinely small businesses
to figure out how to navigate some of these things
because that's not necessarily what our wheelhouse is.
- [Jason] The Youngs experienced this
like many other African American small businesses
trying to take advantage of PPP.
- Knowing the history of financial exclusion
means that we have a program that was already
not gonna work to the best advantage
of business owned by people of color.
- Ashley Harrington is a policy expert
at the Center for Responsible Lending,
a non-profit consumer advocacy group.
So these programs go through the SBA,
the Small Business Administration.
- They go through the SBA,
but the intermediary is a financial institution.
- Has this posed challenges to African American businesses
more so than business owners at large?
- It absolutely has, right.
So any time we have a program that relies so heavily
on traditional financial institutions,
we're automatically gonna have a problem
for businesses owned by people of color,
particularly businesses owned by black people,
to get access to the funds
because they have a different type of relationship
with major financial institutions than other communities.
They have typically not been served well
by the financial mainstream.
- [Jason] The SBA says it and the Treasury Department
value all lenders and are actively engaged in outreach
to Community Development Financial Institutions
and Minority Depository Institutions.
"CDFIs and MDIs," it says, "have traditionally excelled
"in providing financial assistance
"to minority communities and underserved populations."
The Youngs say that, when they launched their business,
they didn't rely on the banking system.
- We didn't go to banks and get approved for loans.
We had to bootstrap it ourselves
and pull out of our 401ks that we had
when we were working and go to friends.
- [Jason] So when the Youngs didn't hear back
about their PPP application, and they still haven't,
it's been weeks, they embraced the same
entrepreneurial spirit that they had
when they first opened their business.
They moved in-person author talks to virtual sessions.
- To have a conversation about where black America is.
- [Jason] They participated in DC's curbside pickup
pilot program.
And they created book bundles for parents homeschooling.
And now, following the killing of George Floyd,
the Youngs say there's been a growing demand
for their books.
They say they've seen a 400% increase
in online sales over the previous year.
Since closing their store to customers,
the Youngs say revenue has dropped only 10%.
- Even though online has been rockin' and rollin',
we don't know how long this new space,
this new era's gonna be here, right.
So even though today it's great,
I'm assuming that, after a while,
the online will kind of drop off,
and so that's what we're looking at
with grants and different funding in that way.
(paper rustles)
- [Jason] To help bridge the gap
and support their three part-time employees,
they also applied for and were granted
an Economic Injury Disaster Loan, or EIDL,
through the Small Business Administration.
EIDLs of up to $10,000 were designed, the SBA says,
"to provide economic relief to businesses
"that are currently experiencing
"a temporary loss of revenue."
They don't have to be repaid.
- So we can have it shipped out with the other book.
No, you're valid.
- [Jason] They know part of their value to the community
is in their curation.
- Our logo is our daughter reading a book.
- [Jason] And helping parents pass on their heritage
to their children.
- Having the online space be there
has been the lifesaver for us
because people can still shop,
people can still get the resources they need at home
as they're homeschooling their kids,
especially if they're looking at culturally-sensitive
and culturally-aware books and resources.
They now have a spot that they can still do that
no matter where they live.
- Experts say the net effect of black-owned small businesses
facing disproportionate challenges
could persist well beyond the COVID pandemic.
So could what we've been discussing today
have an impact on the wealth disparity in America?
- Absolutely.
The important thing to remember is that business ownership
had an incredible impact on wealth creation, right.
Business owners of color were more likely to have
a lot more wealth than people of color
who don't own businesses.
So business ownership is definitely one way
to help people of color build wealth
and get on the track to closing the wealth gap.
And so when we have a situation like this
where they can't get access to a critical lifeline
that will help them stay afloat and stay open,
they are definitely losing wealth
and that has a ripple effect in their entire community.
- [Jason] The Youngs may be doing better
than other minority businesses in their community right now,
perhaps because they're able to offer something
of intangible value, escape and knowledge
at a time of immense hardship.
- So the total is $18.02.
Thank you for supporting us as well.
It means a lot, yeah.
(soft music)