What challenges do you think Black-owned businesses face that non-minority businesses don’t?
Biffrey Braxton, Applied Development Co-founder and Chief Operating Officer, shared his thoughts on the unique challenges Black and minority businesses face.
One of the most pressing challenges Black-owned businesses face is access—access to financial capital and access to opportunities. These issues are compounded by the effects of systemic racism.
Capital is imperative for a business to get off the ground. Despite growing faster than non-minority-owned business, studies have shown that minority companies qualify for less funding, have higher interest rates, and loans are declined more often. As a former finance professional, I understand bank policies, but underwriters should reimagine guidelines which predict a company’s success. Institutions can increase essential funding enabling Black businesses to thrive.
Opportunities, whether through relationships or knowledge, are critical drivers of success. BIPOC (Black, Indigenous and People of Color) owners are not taken seriously, in part, due to unconscious bias.* This impacts the ability to be in the room with decision makers and potential partners. Entrepreneurs must be intentional about building their professional networks through things such as business accelerators, specialty programs and mentorships. For example, Applied Development completed the Goldman Sachs 10,000 Small Businesses initiative, a $500 million investment to provide entrepreneurs with greater access to education, financial capital and support services. These types of connections are critical to lessen the opportunity gap.
While these are formidable challenges, Applied Development continues to navigate these issues to serve our clients, community, and people of all abilities.
*Unconscious bias is defined as social stereotypes about certain groups of people that individuals form outside their own conscious awareness.
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