IIMPLEMENT A SMALL BUSINESS ROADMAP TO RECOVERY
The COVID-19 Pandemic has brought to the forefront the continued and repeated economic injustices against people of color, especially against Black Americans, and has shed more light on the major inequities that minority-owned small businesses are burdened by. Current federal assistance programs do not consider the experience that business owners of color have, nor do they provide enough funding to support them. For instance, 95% of Black-owned businesses are sole proprietors, which limits their access to federal programs. Moreover, 41% of Black-owned businesses were closed during stay at home orders, compared to only 17% of white-owned businesses. Recent surveys provide further validation to these statistics, finding that 45% of Black- and Latino-owned businesses would have to close their doors by the end of the year or sooner, which significantly undercuts the economic health of their communities at large. These disproportionate economic inequalities bolster the mission of the Association of Black and Business Professionals (ABBP) and indicate why it is imperative that a movement toward racial economic equality is implemented and that specific policy measures are required to provide a more equitable playing field.
BOLSTER FINANCIAL WELLNESS MEASURES AND BUSINESS RESOURCES
Overwhelmingly, small business owners of color tend to lack the social capital to guide them in developing their business, and therefore must rely on Community-Based Organizations, State, and Federal Agencies to provide business assistance and education in order to maintain and grow their businesses. These organizations provide guidance on how to build and maintain good credit, navigate business regulations, apply for a loan and more. Historically, people of color have seen drastically lower investments in their communities than their White counterparts, expanding and funding the following measures are indispensable for business owners of color.
Provide more funding and resources for business assistance providers and trusted community based organizations, MBDA, Procurement Technical Assistance Centers, and Local Economic Development Corporations, to expand and provide additional free/low-cost training for business owners and aspiring entrepreneurs. These providers offer essential resources like financial literacy and wellness and assistance in expanding procurement opportunities.
EXPAND ACCESS TO RESPONSIBLE CREDIT AND CAPITAL
Many small businesses and entrepreneurs of color lack traditional lending relationships that are essential to their business’s success. Traditional lenders can be inaccessible because of their complex requirements like high credit scores and loan guarantees. There has also been a pattern of discrimination that excludes people of color. For instance, while Black-owned businesses are more likely to apply for bank financing, less than half of those applications were fully funded. The following recommendations will help to offset and/or prevent those practices through protections to strengthen responsible sources of capital by expanding SBA loan programs such as the 7(a) Loan Guaranty Program, the 504 Loan Guaranty Program and the Microloan Program.
Support measures to collect demographic data from Federal loan programs like PPP to ensure agencies and lenders are not discriminatory in their lending practices. This must also include allowing the Consumer Financial Protection Bureau (CFPB) to collect small business lending data as mandated under section 1071 of the Dodd-Frank Act.