BME companies at ‘greater risk of financial ruin’ during pandemic
BME companies have been disproportionately affected by the coronavirus and the risk of financial ruin has revealed a report.
Black, Asian and minority ethnic communities are at greater risk of dying if they contract the virus – but are more at risk because of the businesses they tend to run.
And nearly two-thirds said they had been unable to access government funding, according to a study commissioned by an all-party group of MPs.
Diana Chrouch, All-Party Parliamentary Group (APPG) Special Advisor to BAME Business Owners, said: “The impact on the economy would be astronomical if a significant number of BAME-run businesses were to close. This could easily result in a loss of billions of pounds.
There are said to be 250,000 businesses run by ethnic minority entrepreneurs, contributing around £ 25 billion a year to the economy.
Many provided frontline services during the lockdown, including pharmacies, convenience stores and take out and general support in their community. Still, the report found that many felt neglected and unable to access state-guaranteed loans and grants at the start of the coronavirus pandemic.
Chrouch, who is also chairman of National Policy BAME for the Federation of Small Businesses (FSB), said: “Many industries have been affected by the coronavirus, but this report shows that it has been particularly hard on minority businesses. ethnic groups as a whole.
“It would greatly benefit the UK economy if these companies were given the resources and support needed to survive the pandemic and grow.”
UK Curry Connect (UKCC), an organization created to raise awareness of skills shortages in the Asian restaurant industry, gathered information from its members as part of a national public consultation.
All-Party Parliamentary Group (APPG) for BAME Business Owners
Moslek Uddin, CEO of UKCC and active member of APPG, said: “Our industry has faced many challenges and this pandemic could be nail in the coffin. ”
UKCC gives industry a voice and lobbies for government support. It also helps develop skills, networks and young talents in the sector. It also helps in solving migration issues.
Moslek, who also runs Chutneys take-out, added: “Lives and livelihoods are at risk and we want our voices to be heard. We need more representation in government.
The consultation, which took place shortly after the start of the Black Lives Matter protests in the UK, revealed long-standing structural inequalities – made worse by the pandemic. Entrepreneurs from ethnic minorities are less likely to have access to bank financing, venture capital or angel investments. A history of mistrust and lack of support has also been reported by some companies run by BAME.
Chrouch said: “Some people have said they are reluctant to seek help because of perceived discrimination and the legacy of a ‘hostile environment’ immigration policy.”
The policy, which was part of a strategy to curb illegal immigrants, has been blamed for the Windrush scandal – where many have been forcibly removed, detained and disenfranchised.
Practical issues have prevented other BAME business owners from claiming government support, such as language and IT barriers. Some cash-strapped homeowners have resorted to savings and taking out payday loans.
There are calls to make financing more accessible and to provide tailored business support to BAME business owners. People of BAME heritage are up to twice as likely to die from COVID or suffer from serious health complications.
They are also more exposed – with a tendency to job in industries such as hospitality and retail, which involve long hours away from home and in roles in direct contact with customers. But there were concerns over the lack of government guidance on health and safety and provision of PPE.
Many BAME business owners have voiced their concerns about the current crisis.
Chrouch said, “I am speaking to people who have invested their hearts, resources and energy in their business.
“Through no fault of their own, they have been hit hard and feel helpless and devastated. ”
There are calls for greater representation and engagement of policymakers with BAME business owners to understand the issues they face and find better solutions.
Chrouch said: “We need representation at the highest level of government, as well as better access to finance and business support. A one-size-fits-all approach just doesn’t work.
Ershad Ali – restaurant manager at the Curry Garden in Orchard Street, Weston
The restaurant has served loyal customers for over 40 years, since it was founded by Mr. Ali’s late father, Junab.
Mr Ali, 37, who studied business and marketing at the University of South Wales in Newport, had seen the custom triple in recent years due to layout changes and menu updates .
But the lockdown, a 10 p.m. curfew and social distancing resulted in a 40% loss in revenue.
Mr Ali said: “The 10pm closure is a loss of custom for us, especially since Indian food tends to be eaten at the end of a meal, and I see no scientific explanation for its implementation. .
“We have halved our reception capacity due to social distancing. We cannot have tables of more than six people and it is difficult to plan for future events like Christmas parties.
“We have a lot of cleaning, compliance and precautions to put in place and the extra workload – for reduced income – is incredibly stressful.”
He said many bookings have been canceled in recent months and he lost thousands of pounds of stock with the foreclosure announcement.
He said he received a small business grant, put staff on leave and had to lay off some employees. But had to dip into his own savings to cover costs like rent.
The father of two said: “I’m afraid I can’t guarantee works for our staff, who have been with us for about 10 years and who are very good at their jobs.
“I’m also worried about proving for my family and we’ve already had to make cuts at home. I try to stay positive, for the sake of my family, staff and business, but when I’m alone I feel like breaking down.
“I’m often awake until the wee hours of the morning, my eating habits are ubiquitous and there have been times I felt like putting everything away. ”
But he said he had received encouraging comments from loyal customers and wanted his father’s legacy to continue.
He calls on all industries to work together and the government to offer continued support if new containment measures are put in place.
He said: “I understand that people’s health has to come first and that there has been government support.
“But business could be hit even harder if there was another foreclosure and we have to think long term.”
Mahboob Rahman – manager of Table Eight in Wedmore, Somerset,
He saw his income drop by around 40% and also had to lay off two staff members.
The place now only serves take-out and is struggling to make ends meet as costs continue to rise.
Mr Rahman said: “People don’t want to go out a lot because I think they’re scared. I had to lay off staff and cut hours for others, which was difficult to do.
“But our bills are increasing, while revenues are very low. The restaurant may be closed, but we still have to pay rent.
“I’m worried for the next six months and don’t know how we’re going to recover. Uncertainty and the lack of clear guidelines make it difficult to plan ahead. ”
The place had to close after a staff member tested positive for COVID, which also affected revenue.
Mr Rahman has signed a lease for another restaurant in Princess Road, Wells, but is unsure how he will be able to afford it if business does not improve.
The father of two said: “I worry about supporting my family and paying my staff, so now I’m afraid to lie down.”