Report shows major losses, stark racial disparity in COVID-19's impact on Washtenaw County business

A new report shows the COVID-19 pandemic has impacted the vast majority of Washtenaw County businesses – and those who need help most may not be getting it.


The Washtenaw County COVID-19 Business Impact Report, released last week by Ann Arbor-based entrepreneurial research nonprofit EntryPoint, is based on a survey of over 400 county businesses. Nearly two-thirds of them reported losing more than half their revenue since February, while only 7% saw their revenue stay the same or increase.


76% said they'd either applied or intended to apply for a loan to support their business, and only 8% of those who had applied for a loan said they'd been denied. But greater disparities appear when the data is analyzed by respondents' race.


88% of business owners of color reported having applied for or intending to apply for a loan to support their business during the crisis. But 19% said their applications had been denied, much higher than the 8% of white business owners who reported having been denied. Only 37% of business owners of color had their loan applications approved, compared to 61% for white business owners. 44% of business owners of color said their applications were still in progress, compared to 31% of white business owners.


Emily Heintz, EntryPoint founder and managing director, says the racial disparity in the data was "very stark."


"We don't do any sort of finessing of the data. It just is what it is," she says. "I think in a report like this, where you're just telling people the facts and then they can draw whatever conclusions they want, the very obvious conclusion is that minority-owned businesses don't have the same access to capital that white-owned businesses do."


Survey respondents skewed heavily towards small businesses. 74% of the business owners who responded to the survey had 10 or fewer employees. While respondents overall were successful in getting loans, Heintz warns that popular initiatives like the Payroll Protection Program are "not necessarily something that is going to be able to sustain" small businesses in the long run.


"If those companies don't have access to the capital they need to get through this, you're going to see a real degradation of the fabric of what people view as the culture and community of Washtenaw County," she says.


The survey remains open and has collected nearly 200 more responses since EntryPoint began compiling data. Heintz anticipates updating some sections of the report in the short term, and doing a follow-up survey in six to 12 months to see how respondents are faring. She hopes that data will be "additionally informative" to the survey's task force of over 20 local chambers of commerce, downtown development authorities, municipal bodies, and philanthropic foundations, who have worked to distribute the survey and will make use of its results.


"Just because we've released the results doesn't mean that people can't still take the survey," Heintz says. "We want as many businesses as possible to take it."


Click here to view the full report.


For more Concentrate coverage of our community's response to the COVID-19 crisis, click here.


Patrick Dunn is the managing editor of Concentrate.

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