Black businesses begin their post-pandemic boom up 38%
Band Sabrina Lynch
- There has been a 38% increase in the number of new black business owners
- 17% of black women are starting or leading new businesses and more than 1.2 million African Americans have made the decision to become self-employed
The impact of COVID-19 has caused immense financial hardship for small businesses across the country, especially African American entrepreneurs, who were one of the hardest hit groups at the start of the pandemic. However, the tides have turned as the number of Black business owners continues to rise, reaching 28% more in Q3 2021 than pre-pandemic levels, compared to 19% of Latino business owners and 5 % Asian. It is thanks to a record number of black female entrepreneurs create their own company and become CEO of their company.
Why it matters: In the wake of the racial judgment on the murder of George Floyd, the sisters are really doing it for themselves to revive the economy and spur new investment within the black community. In the first months of the pandemic, black-owned small businesses closed twice as fast as other businesses, with 58% at risk of financial hardship, with 41% stops. When the Biden administration sanctioned Fiscal Stimulus FundAfrican Americans received fewer business subsidies than their white counterparts and were five times more likely to be out of the Paycheck Protection Program (PPP).
The effects of COVID have caused a regression in racial equity, with millions of African Americans having to quit their jobs due to lack of access to childcare, wage cuts, discrimination on the workplace and company practices that discouraged remote working. Being deprived of resources to get back on their feet has left people of color even more economically disadvantaged and facing the harsh reality of having fewer opportunities to accumulate generational wealth. Fast forward to 2022 where a wave of consumers are mobilizing to support black businesses and just over 1.2 million African Americans making the decision to be independent.
Situational awareness: Black entrepreneurs are raising far more venture capital than before, previously having to manage $72,000 less capital than white startups. However, an additional 800,000 black-owned businesses are needed to achieve true equity. As America sees a 38% increase in new black business owners, it no longer seems like an unattainable dream as African Americans explore more structured models that they can maintain for a longer period of time. .
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