Only 4.3% of America’s 22.2 million business owners are Black, according to a February report by the Brookings Institute. And Black-owned businesses launch with about “a third less capital than their White peers and have difficulties raising private investments from mainstream investment systems,” reported Brookings. While 7% of White business owners get a loan in their first year of business, only 1% of Black business owners do so.
Amid the Covid-19 pandemic, Black-owned businesses have also been hit the hardest. According to a recent analysis by the Federal Reserve Bank of New York, “Black firms have been almost twice as likely to shutter as firms overall.” And just 20% of the Paycheck Protection Program (PPP) loans went to areas that had the highest concentration of Black-owned businesses, the Fed found.
There are, however, resources available for Black-owned businesses. Here are seven that can help, especially amid the pandemic.
Through the grants.gov site, business owners can view over 1,000 federal grant programs, conduct an in-depth search, learn about the application process and ultimately apply.
The Minority Business Development Agency (MBDA) is an agency of the U.S. Department of Commerce that aims to assist minority-owned businesses across the country.
It provides a number of grants and loans for minority-owned firms, including: the Entrepreneurship Education Program for Formerly Incarcerated Persons Grant, the Enterprising Women of Color Grant and the Minority Business Enterprise Inner City Innovation Hub Grant.
The Local Initiatives Support Corporation (LISC) is a non-profit organization that aims to revitalize communities in need through its programs. It supports Black- and minority-owned businesses across the country through its Small Business Relief grant program, which will open for applications on August 31.
The National Minority Supplier Development Council (NMSDC) is a non-profit corporate membership organization that supports minority-owned businesses. The NMSDC has a grant program called the Business Consortium Fund, which is intended to support certified minority-owned businesses.
Accion is a nonprofit organization that provides loans, access to resources and connections to diverse business owners and entrepreneurs. Its application for minority-owned business loans is available on its site.
Backstage Capital is a venture capital fund that invests in women, people of color and the LGBTQ community. Its Entrepreneur Investment applications are viewed on a rolling basis.
The Foundation for Business Equity’s Business Equity Initiative supports and provides funding for Black and Latinx business owners.
Throughout the Covid-19 pandemic, the FBE created a “response strategy team” to advise these businesses and created a “Covid-19 emergency fund” aimed to provide flexible loans and crisis response support teams to Massachusetts-based Black and Latinx businesses with revenues of at least $250,000.