Washington, D.C.— Today, House Small Business Committee Chairwoman Nydia M. Velázquez released a report detailing the devastating impact the coronavirus pandemic has had on Black-owned businesses in the United States. The report surveyed the current business landscape for black entrepreneurs and proposed policy solutions to spark a more equitable recovery.
“Since the beginning of this pandemic, the virus has hit the Black community and Black business owners disproportionately hard,” said Chairwoman Velázquez. “On my committee, we’ve worked to expand access to relief for these businesses by empowering community and mission-based lenders. These steps have led to meaningful progress and helped spread relief to underserved communities. But there is much more we must do. I’m hopeful that this report will provide a sober look at the reality facing Black business owners and help provide a path forward in terms of recovery.”
In 2020, Black business ownership rates dropped 41% between February and April 2020, the largest rate of any racial group. The pandemic has exacerbated long-standing inequalities that make it harder for black-owned businesses to endure the crisis and access recovery resources. Historically, Black entrepreneurs face systemic barriers to success like lack of access to capital, fewer business mentorship relationships, and a general lack of business opportunity. Over the past year, these historic inequalities have combined with hurdles brought on by the pandemic, to further hurt rates of Black-owned business formation and success.
According to the report, Black-owned businesses were less equipped to handle mandated closures, more likely to be located in areas with high volumes of COVID cases and had less access to relief. The report recommends several policy goals that would help level the playing field for Black small business owners if achieved. These include increased access to capital, more mentoring support, and enhanced government contracting opportunities.