Entrepreneurship offers an opportunity to grow and give back to your community. An opportunity we see rising every year in African American and Black-owned businesses. Yet, while entrepreneurship is on the rise, founders still face significant challenges to their growth and profitability. Access to capital for African American and Black businesses has worsened since the start of the COVID-19 pandemic, with a study finding that 41% of Black-owned businesses have ceased operations as of April 2020, compared to 17% of White-owned businesses. (NBER)
We spoke with Taj Benford, Senior Branch Manager III at Seattle Credit Union for some insight to why this stark trend is happening, “Our white counterparts have CPAs and tax accountants on call, and they can get it all done, without worrying about much. We have to worry about everything ourselves. We have to rely on our friends and family, and try to find resources to help.”
Bridgette Johnson, owner of Central Café and Juice Bar, experienced these financial barriers firsthand – even before the pandemic. Bridgette attempted to secure capital to realize her dream of owning a community food business, “We went to conventional banks and we even went to our credit union asking for a business loan,” she mentioned, “those places will not give you a loan unless you have three years in the business. What do new people, [new] entrepreneurs do if they don’t have any money? Or for people that have a little bit like we did, to get the project going?” Bridgette stated.
“If you’re only getting a loan for $500 when your espresso machine is a car, it doesn’t put you over that hump,” Bridgette continued, “To get it really going and get over that hump, somebody needs to give you a chance, and that’s what I think [Business Impact NW does]…It’s really hard for people to get started, so I just want to thank you guys for taking a chance.”
Many small and start-up businesses have had the same experience. Only 4 percent of Black American businesses survive the start-up stage, and even by surviving the start-up stage, Black-owned businesses still disproportionately struggle with debt and raising capital. We asked Taj Benford for advice, “My advice will always be to connect with trusted advisors, ask questions, use your community that is here specifically to assist Black business owners – especially today.” he continued, “To push past the ceiling when you’re automatically told no, you need a [strong] business plan, let these institutions know that you may not have the money now, but if you do XYZ, you can handle this – pandemic or not.”
Organizations like Business Impact NW and credit unions like Seattle Credit Union, focus on working with traditionally underserved populations, including BIPOC entrepreneurs. Business Impact NW is dedicated to providing foundational and financial support for Black-owned small businesses, supporting the chance to build wealth and opportunities for our local communities. We offer a variety of resources in lending, free classes, business coaching, and annual events such as Impact Pitch – that provides an opportunity for startup and early stage businesses to secure funding based on their community impact.
When asked about how he felt about the systemic inequities in funding, Taj stated, “We are being left behind. We are overlooked and underserved. We are also overlooked because we are under-educated. This is why I take pride in making sure my community knows what I know, in helping them grow financially, I have a responsibility in this position that I have… we can’t leave each other behind.”
We acknowledge that these institutionalized barriers have historically prevented Black and African American communities from accomplishing their entrepreneurial goals. We will continue to advocate for lending equality in BIPOC communities – a historical obstacle faced by these communities. If we all do our part in supporting every step of the journey for BIPOC entrepreneurs, then we can finally bring justice to lending inequalities that still prevail.
Find out more about how Business Impact NW’s programs can support your business –
Learn More about Business Impact NW Loans Here
Get Started with Services at Business Impact NW
Donate to Support Business Impact NW Programs
Learn More About Seattle Credit Union Here
