(glove snaps) (phone rings) – Thanks for calling Mahogany Books.
How can I help you? – [Jason] For Mahogany Booksin Southeast Washington DC, this is what business unusual looks like.
Orders taken by phone.
– Yes ma'am.
– [Jason] Books sanitizedbefore 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 accessibleno matter where you live.
I'm from Oklahoma, proudto be from Oklahoma, but I didn't have that typeof access to black books.
– [Jason] When they foundedMahogany 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 andwe had to shut our doors.
It was a little scaryin the very beginning because this was our bread and butter.
– [Jason] African Americansmall business owners have been disproportionatelyaffected by the pandemic.
Because the Youngs had alreadybuilt their online business, they didn't have to shut down entirely, but nationwide, from Februaryto April of this year, the number of active African American small business owners dropped 41% compared to 22% of allactive 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 FederalPaycheck Protection Program, or PPP, passed as part ofthe CARES Act in late March.
– The motion is adopted.
(politicians cheer)(gavel pounds) – [Jason] The Youngsapplied to the program through their bank.
– Before I was able to figure it out, the first allotment ofmoney had already run out.
It takes a little bit more for, I think, genuinely small businesses to figure out how tonavigate some of these things because that's not necessarilywhat our wheelhouse is.
– [Jason] The Youngs experienced this like many other AfricanAmerican small businesses trying to take advantage of PPP.
– Knowing the historyof financial exclusion means that we have aprogram 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 isa financial institution.
– Has this posed challengesto African American businesses more so than business owners at large? – It absolutely has, right.
So any time we have a programthat relies so heavily on traditional financial institutions, we're automatically gonna have a problem for businesses owned by people of color, particularly businessesowned by black people, to get access to the funds because they have a differenttype of relationship with major financial institutionsthan other communities.
They have typically not been served well by the financial mainstream.
– [Jason] The SBA says itand the Treasury Department value all lenders and areactively engaged in outreach to Community DevelopmentFinancial Institutions and Minority Depository Institutions.
“CDFIs and MDIs, ” it says, “have traditionally excelled “in providing financial assistance “to minority communities andunderserved populations.
” The Youngs say that, whenthey launched their business, they didn't rely on the banking system.
– We didn't go to banksand 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 theYoungs 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 authortalks to virtual sessions.
– To have a conversationabout where black America is.
– [Jason] They participatedin DC's curbside pickup pilot program.
And they created book bundlesfor parents homeschooling.
And now, following thekilling of George Floyd, the Youngs say there'sbeen 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 revenuehas dropped only 10%.
– Even though online hasbeen 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 differentfunding in that way.
(paper rustles) – [Jason] To help bridge the gap and support their threepart-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 weredesigned, 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 shippedout with the other book.
No, you're valid.
– [Jason] They know part oftheir value to the community is in their curation.
– Our logo is our daughter reading a book.
– [Jason] And helping parentspass 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 theresources they need at home as they're homeschooling their kids, especially if they're lookingat culturally-sensitive and culturally-aware books and resources.
They now have a spot thatthey can still do that no matter where they live.
– Experts say the net effectof black-owned small businesses facing disproportionate challenges could persist well beyondthe COVID pandemic.
So could what we've been discussing today have an impact on thewealth disparity in America? – Absolutely.
The important thing to rememberis that business ownership had an incredible impacton wealth creation, right.
Business owners of colorwere more likely to have a lot more wealth than people of color who don't own businesses.
So business ownershipis definitely one way to help people of color build wealth and get on the track toclosing the wealth gap.
And so when we have a situation like this where they can't get accessto a critical lifeline that will help them stayafloat and stay open, they are definitely losing wealth and that has a ripple effectin their entire community.
– [Jason] The Youngs may be doing better than other minority businessesin their community right now, perhaps because they'reable to offer something of intangible value, escape and knowledge at a time of immense hardship.
– So the total is $18.
Thank you for supporting us as well.
It means a lot, yeah.