Freda Lipscomb Thornton kept her customers' budgets in mind. Gerald Burr Jr. read the economy's signals better than some economists did.
Thornton and Burr are local black business owners whose companies have survived the country's deep recession and are in position to take advantage of the recovery.
The recovery has been painfully slow, and for some minority businesses the path has been particularly steep.
Thornton owns five McDonalds franchises in the Richmond area. Burr is president and CEO of Canterbury Enterprises, a general contracting company based in Chester. Both understand the struggles that other minority entrepreneurs have encountered.
"You can't get a loan" to start a business or to expand, Thornton said. "A few years ago, if you had a couple of successful franchises and you needed $300,000 to remodel, you could state your case and the banks would listen. Now, it wouldn't matter if you had 50 franchises."
Thornton said government programs remain in place to encourage loans for minorities and small businesses, but "the guidelines have become very stringent. ... Even for an established business, there is much more scrutiny."
Kenneth N. Daniels, a professor of finance at Virginia Commonwealth University, said lending institutions aren't basing loans on a business' potential for success. "They've got to have some collateral," he said, to reduce their risk.
Minority business owners, he said, are often unable to offer the necessary collateral, especially in a distressed economy. In the past, he said, banks could sell such loans on a secondary market to reduce their risk, but during the recession "that secondary market collapsed."
Like Thornton, Burr has remained successful. Recently he was named 2012 Entrepreneur of the Year by the Metropolitan Business League -- but he has been through some belt-tightening. He had 30 employees in 2010. Now he has 20.
"We have some projects on the horizon that will be creating some jobs," he said, "but I wouldn't say we'll be back up to 30 right away."
Daniels said Burr's wait-and-see approach to hiring is typical among minority businesses, given the pace of the recovery. That caution among black business owners, he said, contributes to the unemployment gap for blacks.
January's numbers from the U.S. Bureau of Labor Statistics put unemployment among whites at 7.6 percent, blacks 14.3 percent, Hispanics 10.5 percent and Asians 6.5 percent.
Unemployment among blacks 16 to 19 years old is nearly 40 percent, almost double the unemployment rate for white teens.
Businesses owned by Latinos have felt the recession's impact more deeply than black-owned businesses because of Latino concentration in construction, Daniels said.
Blacks around the country have wanted to penetrate the housing construction business for years, he said. "They haven't been very successful. This may have turned out to be a blessing in disguise."
Construction accounts for 14.1 percent of Latino-owned businesses nationally, he said, citing a Georgia Tech study. The prolonged housing industry slump has been a heavy burden on those businesses, forcing many to close.
Daniels said the study shows that black business owners' top fields are professional and technical services (15.5 percent) and business services (13.7 percent), fields that weathered the soured economy relatively well.
