Bank of America: ‘Black-owned businesses are growing–but they need our continued support to thrive’
As our nation draws attention to the significant contributions of historical Black figures this month, we must note the role Black entrepreneurs have played in those contributions and think about how we can further help Black-owned businesses thrive across the country.
While we faced a global pandemic and ongoing civil unrest, we also witnessed an incredible surge of talented Black entrepreneurs starting their own businesses. Across the United States, the rate of Black business ownership rose by 38% compared to pre-pandemic levels.
Today, Black small business owners remain confident despite great economic uncertainty. Black entrepreneurs are more optimistic than other groups about their business outlook, with the majority expecting revenue to increase and planning to expand their businesses this year, according to a recent Bank of America survey of small business owners.
That optimism translates into real economic impact, job growth, and progress in closing the racial wealth gap. Recent census data shows that there are 3.12 million Black-owned businesses in the U. S., generating $206 billion in annual revenue and supporting 3.56 million U.S. jobs. That’s millions of people filling the needs of our local communities and creating jobs for workers of all backgrounds.
Despite growing prosperity and recent strides, it’s still harder to launch a business and stay afloat as a Black entrepreneur. Some 57% of Black business owners surveyed expressed concern about credit availability–and 40% of Black business owners do not think they will ever have equal access to capital.
We recognize the challenges that Black entrepreneurs face–and we’re making investments to help them thrive.
Expanding access to capital
Access to funding is critical for the growth of new business. Black entrepreneurs are more likely to report having trouble accessing capital. When they secure funds, it’s usually a smaller amount.
Black-founded startups accounted for just 1% of venture investments in the U.S. last year, according to data from Crunchbase. As part of Bank of America’s commitment to advancing racial equality and economic opportunity, we have committed more than $400 million to 100+ minority and women-led mission-focused venture funds.
Non-traditional sources of capital such as community development financial institutions are powerful resources to spur Black business growth when traditional funding isn't available. These institutions are specifically focused on providing loans in areas where opportunity gaps exist.
Increasing educational opportunities
More than half of Black small business owners report they are self-taught entrepreneurs–and most of them are eager for more educational resources.
Our educational institutions must create better pathways for entrepreneurs to learn and grow. For this reason, it’s critical to make investments in educational opportunities for underrepresented entrepreneurs on a broad scale and at the local level. That includes continued investments in Historically Black Colleges and Universities as a pipeline for entrepreneurial talent. Let’s make sure that the outpouring of support for HBCUs wasn’t just a flash in the pan.
Fostering community support
Black businesses need ongoing support so they can continue to succeed and thrive, not only for themselves but also for the larger community. Every day, we are inspired by the resilience and determination of business owners–our clients, partners, and stakeholders–across America.
In communities across the country, we must continue to support the creation of more Black businesses by expanding access to capital, increasing educational opportunities, and forging collaborative partnerships.
We're proud to support Black entrepreneurs this month and all year long, and we know that the Black businesses we support today will help inspire generations of future entrepreneurs.
D. Steve Boland is Chief Administrative Officer at Bank of America.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
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