February is Black History Month, a federally recognized celebration of African American contributions, and a timely opportunity to respond to the economic disparities experienced by African American businesses as a step to move forward. The Community Fund of North Miami Dade (CFNMD) works to enable and support African Americans and other underserved groups to realize their economic opportunity through entrepreneurship.
CFNMD’s work is important because many African-American business owners can’t access the financial resources they need to grow their companies. According to BlackBusiness.com, Florida is the third state with the most Black-owned businesses. Based on a 2018 survey from Guidant Financial, 80% of African-American entrepreneurs expressed lack of capital as their biggest business challenge, 10% more than the average small business owner in the survey. Yet, according to The Washington Post, fewer Black small businesses are approved for financing, generally for lower amounts and higher interest rates.
And in the face of the pandemic, Black-owned businesses have also fared less favorably than other groups. According to the Federal Reserve Bank of New York, the number of active Black-owned businesses fell 41% between February and April 2020, in comparison to 22% for all groups. SCORE’s report, The Megaphone of Main Street: The Impact of COVID19, indicates that Black-owned businesses were more likely to seek but less likely to receive loans and government relief funding. Reasons for this include weaker cash positions, weaker bank relationships, preexisting funding gaps, and lack of proper documentation required to access funding.
And while African American businesses have faced more challenges, we as a community have the opportunity to support and celebrate their excellence by using the power of our wallets. Here are a few ways to use your power to support Black-owned businesses:
Start with your community. Identify the local businesses in your community and support them with your wallet. The dollars you spend will circulate in your own community spreading the wealth locally.
Be intentional with a quick search. There are many directories of Black-owned businesses to guide you before you shop. Here are 10 recommended apps and listings by Fast Company.
Leave reviews. Help others see the excellence offered by the businesses you already trust, to garner more support and patrons.
Follow and share posts on social media. Spread the word to your community and help the businesses expand their reach.
We have the power, as a community, to create the change we want to see. We vote with our dollars every time we spend. A simple online search of African American businesses, plus a purchase is a step in the right direction of economic equality and opportunity for all.
Black-owned businesses not only create jobs, but are important anchors in our communities and threads in the fabric of our society.