Small Businesses Maintain Their Rightful Place As The U.S. Economy’s Backbone

CBx Vibe:Entrepreneur” Pharrell Feat. Jay-Z

By Earlene Greene

  • 883k+ business applications were submitted in the 2nd Quarter of 2020, up to a record 40%
  • The number of firms owned by African-American women has grown by 164%

Small businesses are on the rise reaching their highest quarterly level on record at 40%, building on the 883,000 plus business applications submitted during the second quarter of 2020. Leading the pact are Black women who start businesses at the fastest rate of any racial group according to research by American Express. However, they are still being shut out when it comes to access to capital.

Why This Matters: Since 2007, the number of firms owned by African American women has grown by 164%. As of 2018, women of color account for 47% of all women-owned businesses.  An estimated 5,824,300 women-of-color-owned businesses employ 2,230,600 people and generate $386.6 billion in revenues.  The report from American Express estimates that if revenues generated by minority women-owned firms matched those currently generated by all women-owned businesses, they would add four million new jobs and $1.2 trillion in revenues to the U.S. economy.  

An estimated 5,824,300 women-of-color-owned businesses employ 2,230,600 people and generate $386.6 billion in revenues

“Women have been taking control, frankly, for centuries,” says Kathy McShane of the U.S. Small Business Administration’s Office of Women’s Business Ownership. “But now we’re talking about it.”  

According to the Federal Reserve System’s 2016 Small Business Credit Survey, Black women are more likely than their non-minority peers to identify access to credit as a challenge, less likely to receive some or all of the financing they requested, denied loans and pay higher interest rates than white counterparts. In addition, survey results from the advocacy group Small Business Majority revealed that the Paycheck Protection Program denied 23% of Black business owners compared to 9% Whites, 13% Latino and 9% Asian.

Situational Awareness: Small businesses remain the backbone of the U.S. economy.  The surge in new businesses is not a comeback, because small businesses never left their place of prominence. Additionally, economists attribute some of this growth to COVID-19 stimulus checks. It’s important to remember that fair and equitable support of women-of-color-owned businesses will go a long way towards economic recovery.  

CBx Vibe:Entrepreneur” Pharrell Feat. Jay-Z

CONTRIBUTOR

Earlene Greene

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