Financial Institutions, the time to support Black women-owned businesses is now.
By Hannah White, 2022 BLAZE Fellow, Senior at the University of South Carolina
Columbia, South Carolina -- February 13, 2022 -- Black women continue to face discrimination and neglect from financial institutions, despite the fact that they are positioned to play an increasingly visible and important role in the Unites States' economic and political future - as noted by Harvard Business Review.
Specifically, Black women are the fastest-growing demographic of entrepreneurs in the U.S. Each month, 550,000 Americans launch new businesses every
month. Overall, Black women represent 42% of newly created businesses and own 36% of all black-owned employer businesses in the U.S. (Merrimack College)
Despite this incredible pace, Black female entrepreneurs often find themselves self-funding their businesses due to the lack of capital and resources available to them. To make matters worse, only 29% of Black women live in households with incomes over $75,000 compared to 52% of white males.
It is a myth that Black women are less deserving of financial support via loans. Research shows that Black women starting businesses in the U.S. are highly educated. More than three-fourths of Black women entrepreneurs have at least a college degree (compared to slightly more than one-fourth of Black women in the general population who have a college degree or higher), according to a recent study by the Harvard Business Review.
Therefore, it is not a lack of propensity to scale that is keeping Black women marginalized from funding - but rather biases that lead to discriminatory actions. Actions that bar Black women from capacity-building training, expert advising, collaboration opportunities, and resources can help their businesses grow and sustain. Discriminatory actions have ensured that even though 17% of all Black women are starting businesses today (compared to 10% of white women and 15% of white men), only 3% of Black women run mature businesses today.
The time is now to turn a history drenched in injustice and exclusivity into a future of inclusivity and support for Black women in commerce.
Although a multifaceted approach is necessary to address the issues Black women entrepreneurs face - we note that research grounded in history, lived experiences, and facts are essential to motivate change. The change we seek will require intentional efforts by the public and private sectors to address gaps and biases in entrepreneurial ecosystems in a way that provides support for Black women entrepreneurs that bring economic and collective value to the U.S.
We assert that sustainable change cannot happen solely through changes in materialistic resources and income, but more broadly and impactfully through terms of choices, capabilities, and freedoms. We understand that barriers to achieving change occur in every environment and community - but through altruistic progressive initiatives, these obstacles can be addressed one by one.
Here at BLAZE GROUP, we are collecting data and research in order to publish an inaugural report on Black women-owned businesses. Insights gained from this report will provide critical insights to financial institutions and other companies that are working to become more agile in their approach for enhanced inclusion. Please join us as we collectively unite to advocate and implement change. We ask that you share this survey link with your clients, partners, communities, and networks, asking that Black female entrepreneurs participate in our study.
If you are a Black female entrepreneur who would love to be part of the dynamic approach we are taking to provide more transparency into the experiences and hurdles of Black women-owned business leaders, please participate in our data collection survey by clicking here.
We commit to edifying you and Black female entrepreneurs around the globe with the publication of this body of work that is forthcoming. Please share this article with other individuals within your network as well!
Separately, below are a few funding directories that disclose grants and other funding opportunities available to Black women entrepreneurs.
We are in this together. Let's join hands to drastically increase the percentage of fully-funded Black women-owned businesses.