There are more and more businesses owned by Blacks, Aboriginals and People of Color (BIPOC): Over the past 10 years, they accounted for more than half of all businesses created in the United States. and thus created 4.7 million jobs. At the same time, these groups face significant obstacles. Even though the number of minority-owned businesses increased by 35%, the average gross revenues of these businesses increased. decreased by 16%.
One of the reasons is access to capital. The Fed 2019 Small Business Credit Survey, which focused on companies belonging to diverse groups, found that BIPOC business loan applicants tended to perform worse than their white counterparts. Compared to white business owners, black and Hispanic-owned businesses were more likely to receive lower funding shares than they requested, if any. As a result, BIPOC-owned companies have said they are reluctant to even apply for financing, which means these entrepreneurs have also relied more on their personal funds and credit scores to keep their businesses afloat.
In addition, when a disaster strikes, it hits businesses belonging to various groups harder. A report from the Federal Reserve Bank of New York found that the number of active business owners overall declined by 22% between February and April 2020, at the height of the COVID-19 pandemic; however, the differences between the closure rates are striking. The report found that the number of black business owners fell 41%, Latinx business owners fell 32%, and Asian business owners fell 26%. By comparison, white business owners saw only a 17% drop.
Why? In addition to the systemic barriers that place the majority of BIPOC-owned companies at the geographic center of the most underserved areas during crises, BIPOC-owned companies are also on more volatile ground before disasters, with weaker cash positions. , weaker banking relationships and gaps in pre-existing funding.
A number of nonprofit, government and private sector resources are springing up to fill the need with grants, networking and accelerator programs specially created for BIPOC entrepreneurs. Here are a few.
Networking and mentoring groups for companies belonging to BIPOC
JEDI collaboration
JEDI collaboration is a group for members of the natural products industry who seek to infuse their businesses and the food ecosystem as a whole with justice, equity, diversity and inclusion. JEDI offers action opportunities, webinars, events and other resources for companies looking to embed these principles into the fabric of their businesses.
Potluck Project
Potluck Project is a one-year mentorship program founded by people of color for people of color starting businesses in the consumer packaged goods industry. In addition to mentoring, Project Potluck offers social and educational events designed to build community and expand knowledge.
Hello Alice
Hello Alice connects underserved small business owners (from women and immigrants to veterans and minority groups) with resources that can help them. In addition to in-person workshops and accelerators across the United States, Hello Alice also connects business owners with online opportunities and resources tailored to each person’s unique needs.
Latino Commercial Action Network (LBAN)
LBAN enables Latinx entrepreneurs to grow their businesses through research, education, mentorship, capital engagement and wealth creation.
Hispanic National Business Group
Founded in 1985, the Hispanic National Business Group is for entrepreneurs, business owners and senior executives looking for networking and support.
Accelerators and commercial resources for companies belonging to BIPOC
Academy of Latino Entrepreneurs
Founded by the Coca-Cola Foundation and the Verizon Foundation, the Academy of Latino Entrepreneurs is designed to train, motivate and inspire Hispanic women to start or improve their businesses.
MBDA
The Minority Business Development Agency (MBDA) of the United States Department of Commerce is the only federal agency fully dedicated to the growth and global competitiveness of minority businesses. It invests in a nationwide network of business centers (staffed with business experts to help companies raise capital, compete for contracts, identify partners and more), specialist centers (export centers, Federal Manufacturing and Supply) and Grants for Women of Color, Former Incarcerated Persons, Alaska Native American Indians / Native Hawaiians, and other members of the BIPOC community.
New Voices Foundation
Specifically for women of color, New Voices Foundation provides entrepreneurs with access, capital and expertise through pitch competitions, mobile accelerators, coaching and mentoring, e-learning and skills development, etc. So far, $ 1.4 million has been invested in businesses owned by women of color.
National Minority Supplier Development Council (NMSDC)
By certifying companies owned by minorities, NMSDC Connects members of the supply chain to business opportunities as well as funding, advocacy, learning opportunities and more.
Sephora acceleration
Founding beauty brands of color participating in Sephora acceleration embark on a six month journey that includes an intensive boot camp where they will learn the skills necessary to build a successful business and get started at Sephora.
Lending, banking and investment options for companies belonging to BIPOC
Accion
AccionThe team of loan officers specialize in loans to businesses owned by BIPOC and are trained to help entrepreneurs overcome some of the unique and inherent obstacles they face.
Aspen Capital Fund
Aspen Capital Fund provides resources to help connect Hispanic startups and businesses with investors. The fund helps entrepreneurs every step of the way, from understanding how to successfully raise capital to developing marketing campaigns.
Green wood
Green wood is a black-owned banking system developed to support black-owned businesses. The bank also donates $ 10,000 each month to Black and Latinx companies.
Capital Kapor
This Oakland-based fund is committed to financing under-represented companies, including companies owned by BIPOC. Indeed, 59% of the current investments of Capital Kapor have a founder who identifies as an underrepresented woman and / or person of color.
Our fair share
Our fair share educates and guides minority small business owners through the Paycheck Protection Program (a loan program established under the CARES Act) and processes loan applications.
Grants for companies belonging to BIPOC
The coalition to support black businesses
the Coalition to Support Black Businesses brings together a number of financial and business partners over the next four years to provide more than $ 13 million in grants to black small business owners as they recover from the COVID-19 pandemic and chart the way forward .
Comcast RISE Investment Fund
Eligible BIPOC-owned businesses in the Atlanta, Chicago, Detroit, Houston, and Philadelphia areas can apply for grants of $ 10,000 through the Comcast RISE Investment Fund, which focuses on small businesses that have been in business for three or more years with one to 25 employees.
Empower project
In an effort to reduce widespread inequalities and disparities in wealth, the Empower project donates over $ 500,000 in capital, goods and services to black-owned CPG businesses through its Power Pitch contest and other sites.
Food and Beverage Investment Fund
The James Beard Foundation recently launched the Food and Beverage Investment Fund for Black and Native Americans, which provides $ 15,000 to small black and Aboriginal owned food and beverage businesses.
Black-owned beauty brand grant from Lashify
Lashify invests $ 100,000 in black owned beauty brands in need of marketing and production funds. Recipients will also benefit from mentoring from the Lashify leadership team. Contact Lashify by email at [email protected] and send a link to your business, name, Instagram handle or short bio.
Michigan Good Food Fund
Michigan Good Food Fund supports businesses from farm to fork, working to increase access to healthy food and create economic opportunities in communities that need it most. Racial and social equity is a priority for this fund, which has so far invested $ 17 million in loans and grants to Michigan food businesses.
Rebuild the block
The redistribution of wealth and knowledge to black communities and businesses is at the heart of Rebuild the block. Each cycle, up to 15 companies are eligible to receive funds.
Large scale pitch challenge
The National Black MBA Association Large scale pitch challenge gives startups the ability to connect with investors and venture capitalists, and awards prizes ranging from $ 1,000 to $ 50,000.
Seed grant from the black founder of the SoGal Foundation
The SoGal Foundation and its co-sponsors are offering cash grants of $ 10,000 and $ 5,000 to black women or non-binary entrepreneurs as part of its program Black Founder’s Seed Grant program. The winners, chosen at random, will also benefit from mentorship and lifetime access to the foundation’s leadership team.
We Stan for her
Barefoot We Stan for her Grants of $ 10,000 provide funding to five black women entrepreneurs. It also includes business coaching and mentoring through the New Voices Foundation.
