Business News: Information resources for natural product companies belongs to BIPOC.
Minority-owned businesses are increasing in number: over the past 10 years they have accounted for more than half of all businesses created in the United States, creating 4.7 million jobs. At the same time, these groups face significant barriers. Although the number of minority-owned firms increased by 35%, the average gross revenues of these firms decreased by 16%.
One reason is access to capital. The Fed’s 2019 Small Business Credit Survey, which focuses on minority-owned businesses, found that BIPOC business loan applicants tend to perform worse than their white counterparts. Compared to white entrepreneurs, black and Hispanic-owned businesses were more likely to receive lower or no funding shares than required. As a result, minority-owned companies reported that they had drifted apart from even applying for funding, which meant these entrepreneurs were also relying more on personal funds and credit scores to keep their businesses afloat.
Also, when disaster strikes, it hits minority-owned businesses the hardest. A report from the Federal Reserve Bank of New York found that the number of active entrepreneurs overall decreased by 22% between February and April 2020, at the height of the COVID-19 pandemic; however, the differences between the closing rates are striking. The report found that the number of black entrepreneurs fell by 41%, Latinx entrepreneurs fell by 32%, and Asian entrepreneurs fell by 26%. By comparison, white entrepreneurs only experienced a 17% decline.
Parallel to the systemic barriers that place the majority of minority firms at the geographic center of the most disadvantaged areas in times of crisis, minority firms also find themselves on more fragile ground before the disaster, with lower cash flow, weaker ratios. pre-existing banking and funding gaps.
A range of nonprofit, government and private sector resources are emerging to meet the needs, with grants, networks and acceleration programs created specifically for BIPOC entrepreneurs. Some of these are described below.