There has been a noticeable rise in Black business ownership since the beginning of the pandemic, and Black women are fueling it.
At the start of the pandemic, Black-owned businesses suffered. Between February and April 2020, Black business ownership dropped by more than 40%, the most significant drop of any racial or ethnic group, according to a report from the House committee on small business.
“Since the beginning of this pandemic, the virus has hit the Black community and Black business owners disproportionately hard,” said U.S. House of Representatives Small Business Chairman Nydia M.Velázquez (D-NY). “On my committee, we’ve worked to expand access to relief for these businesses by empowering the 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.”
Black business ownership rates dropped to 41% between February and April 2020, the largest rate of any racial group. According to the committee, the pandemic magnified the long-standing inequalities, making it more difficult for Black-owned businesses to endure the crisis and access recovery resources. Black entrepreneurs historically have faced systemic barriers to success, including a lack of access to capital, fewer business mentorship relationships, and a general lack of business opportunities.
But, the Biden administration has recently pointed to women in the Black community, reporting that a record number have started new businesses and are the fastest-growing group of female entrepreneurs.
“At a time when folks are rethinking their lives and choices, it is not surprising that more Black women are electing to become CEOs of their own companies rather than waiting for their intelligence and skills to be recognized at their current firms,” Melissa Bradley, founder of 1863 Ventures, an agency for Black and brown entrepreneurs, told Business Insider.
Millions of Black women departed employment during the pandemic because of low pay, a lack of child care options, and concerns over remote work. Many believe that the rise in Black women entrepreneurs directly results from their wanting more control over finances and work life.
“If you start your own business, some of those obstacles may not be as acute as if you were relying on employment from someone else,” the Wells Fargo’s chief economist, Jay H. Bryson, told Insider.