Within 2 months of Covid-19, more than 440,000 black-owned business closed their doors for good.
The devastating impact of Covid-19 amplified the challenges to business ownership in the black business community — racial bias, lack of mentorship and access to capital — and the Inclusivity Project aims to do something about it.
The aftermath of Covid-19 on black Businesses
More than 1 million black-owned businesses were in the U.S. at the beginning of February 2020*. By mid-April, 440,000 black business owners had shuttered their company doors for good — a 41% plunge.
Source: Research from the University of California at Santa Cruz.
58% of black business owners said their business’s financial health is “at risk” or “distressed” during the COVID-19 pandemic.
Source: Federal Reserve Bank of New York
The average level of startup capital for black entrepreneurs is just $35,205.
Black business owners receive less business financing, less often, and at higher rates.
Source: Statistical Data from Fundera.com.
We’re taking this moment and creating a movement
Starting and growing businesses take a significant investment of both time and money. We’re convinced that the only way to create meaningful change in the black business economy is to make deep relationships and carry out a wholehearted commitment to black entrepreneurs by going the distance with them along their business journey.
While the impact of Covid-19 exaggerated the disparities in the black small business community — historically, black entrepreneurs have faced roadblocks and challenges to success.
Every day, black business owners and entrepreneurs make invaluable contributions to communities across the State of California. Their success is essential to California’s economy but more importantly, is the future prosperity of black communities in California.
The leadership at Norcal SBDC has launched this first-ever black Entrepreneurship Initiative with a holistic approach to addressing three factors that significantly impact the lifespan and health of a business – human, financial, and social capital.
Black entrepreneurs lack access to funding and other resources critical to building a successful business. Almost no one gets to start armed with a check for the full amount they need to get things off the ground. With black business owners specifically, the most popular financing methods were cash and help from family and friends.
Without proper financing, it is difficult to get the employees needed, to advertise, and to purchase the equipment and materials needed to start scaling the business. Black creatives start their businesses on lower funding because of these socioeconomic barriers, which has an adverse effect on starting and growing their companies.
We’re planning to invest our time, talent, and resources into each business that participates in this movement. Our charge and challenge are to connect black-owned businesses with the mindset and capital to help them go the distance, creating jobs, services, and contribute towards meaningful community impact.