Black Business Financial Access

“Black start-ups face more difficulty in raising external capital, especially external debt. We find disparities in credit-worthiness constrain black entrepreneurs largely because they expect to be denied credit, even when they have good credit history and in settings where strong local banks favor new business development.” -NBER Working Paper No. w28154

Racial disparity and access to capital among black business owners and black start-ups, according to NBER, indicate that black businesses start small and stay smaller the first eight years. In the Kaufman Firm Study, only 1% of black business owners receive financing in comparison to 7% of white business owners. The lack of capital and access to financing has a lasting impact on black-owned businesses especially within the first few formative years of starting a business. This often resorts to severe losses or a dependence on sourcing funding through alternate streams, whether it is borrowing from family members, friends, personal connections or crowd-funding over a prolonged course of time. Black-owned businesses are further vulnerable and susceptible to surviving unexpected financial set-backs due to significantly lesser financial assets or reserves than white businesses. 

Investing in and redirecting your dollars to shopping black contributes to the longevity of black-owned businesses. Here’s a great compilation of black-owned businesses in Dallas: https://www.unation.com/stuff-to-do/black-owned-businesses-in-dfw/