Small businesses are more than places of commerce -- they are places of community. Markets, restaurants, salons, and barber shops have for many years been spaces to gather and spend time with our family, friends and neighbors.
Yet achieving success as a Black small business owner is more challenging than it’s ever been. As the owner of a small business that helps other small businesses with marketing and branding services, I’ve seen how small businesses are impacted during economic downturns.
During the 2008 recession, small businesses were not offered bailouts or relief. Our firm lost 60% of its revenues and 82% of our workforce. Small business owners had to use retirement plans and savings. Even with that sacrifice, we barely survived.
We’ve been just as hard hit this time around. The pandemic has highlighted the disparities in access to capital through slow and often dysfunctional relief efforts to small, minority-owned firms. And the numbers bear this out: the latest reports show 3.3 million U.S. small businesses have closed permanently due to COVID-19 -- 40% of which are African American owned and 32% of which are Hispanic owned.
Why have minority-owned businesses been particularly hard hit? Because too often, Black and Brown owned companies don’t have a solid financial foundation to weather storms like this. Typically, they are first generational companies, and access to traditional lending institutions range from limited to nonexistent.
While small business ownership has historically been one of our country's cornerstones for wealth building and job creation, persistent racial disparities in wealth and access to capital, along with outright discrimination in the financial sector, have contributed to inequities in small business ownership, growth, and success.
This fight for economic justice was what Dr. King saw as the next phase of the civil rights movement after the passage of the Civil Rights Act and Voting Rights Act. It’s why he created the Poor People’s Campaign, a multiethnic coalition to advocate for the idea that everyone should have what they need to live.
“It isn’t enough to integrate lunch counters. What does it profit a man to be able to eat at an integrated lunch counter if he doesn’t have enough money to buy a hamburger?” Dr. King famously said.
The civil unrest we are seeing today is because America never completed Dr. King’s mission of addressing the economic rights of African Americans. That is what makes Black owned small businesses so important to the effort to build wealth and economic prosperity in our community.
These are exceedingly difficult challenges we must confront, and we must have a leader of our nation who’s ready to take them head-on.
Joe Biden recognizes that we cannot build back our economy without a major mobilization of effort and resources to advance racial equity across the American economy. That is why racial equity is a distinct pillar of his Build Back Better plan for jobs and economic recovery, and it is incorporated in each of the other pillars.
As president, Joe will launch a historic effort to empower small business creation and expansion in economically disadvantaged areas – particularly for Black-owned businesses.
His plan starts with aid to help small businesses survive the current COVID crisis and come out the other side strong, and he is launching a special, ongoing initiative to empower these entrepreneurs to succeed and grow with a three-prong Small Business Opportunity Plan:
Spur more than $50 billion in additional public-private venture capital to Black and Brown entrepreneurs by funding successful state and local investment initiatives and making permanent the highly effective New Markets Tax Credit.
Expand access to $100 billion in low-interest business loans by funding state, local, tribal and non-profit lending programs in Black and Brown communities and strengthening community banks and minority-owned financial institutions.
Eliminate barriers to technical assistance and advisory services by investing in a national network of cost-free business incubators and innovation hubs and intensive business seminars.
Joe Biden recognizes that these racial disparities existed before the current occupant of the White House, but they have only worsened in light of coronavirus and Donald Trump’s failed leadership. Joe’s jobs and economic recovery agenda is built on the proposition that we must build our economy back better than it was before the COVID-19 crisis.