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Supporting Entrepreneurs of Color During COVID-19 and Beyond

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The BLCK Family installs performance art shows that bring community members together for family-style meals and conversation.

How expanded financial assistance, a streamlined application process and creative legislation can help Black and brown-owned businesses revive communities hit hardest by the pandemic.

At the start of the COVID-19 pandemic, many small-business owners of color were concerned about whether they could continue to support their communities.

“I felt a fear of the unknown,” says Rashaud Michel, co-founder of the Miami-based creative collective the BLCK Family. The collective installs performance art shows that bring community members together for family-style meals and conversation.

The pandemic brought the BLCK Family’s shows to a halt in early 2020, leading to uncertainty about the future of the collective. According to Michel, “We wanted to continue to reach the goals we had set for ourselves, but without being together in person, there was fear about where we would go next.”

Employees are an important part of a small-business owner’s community. Many entrepreneurs felt concern for the health and financial stability of their staff during the pandemic.

“I worried about what would happen to my employees, and how I could protect them as best I could,” says Chris Goode, owner of Ruby Jean’s Juicery in Kansas City, Mo.

Jessica Somera, owner of the freight-forwarding service ARCA World Logistics, had similar feelings. “My priority was that my team was safe, and that they felt comfortable. I wanted people to be able to put themselves and their families first.”

As entrepreneurs of color, Michel, Goode and Somera are critical to the economic growth of the areas in which they live. All three hire from within their communities, and their organizations contribute to the financial and cultural well-being of their neighborhoods.

In reaction to the impacts of COVID-19, federal, state and local governments have offered support to business owners through loans, grants and eviction moratoriums. Yet, these resources have often fallen short of addressing the needs of diverse business owners because they address symptoms and not root causes.

While emergency loans and grants might serve to address shortfalls due to lack of customers, they do not make up for lack of generational wealth caused by historic disinvestment in Black and brown communities.

COVID-19 has disproportionally impacted business owners of color due to systemic racism that has created disparities for people of color across systems and institutions. According to a report by the U.S. Chamber of Commerce, entrepreneurs of color were more likely than others to consider closing their businesses permanently during the pandemic and struggled to secure loans.

“The pandemic and civil unrest only highlighted the inequities that already existed for historically underutilized businesses,” says attorney Rodney Strong. Strong collaborated with 10 cities from the Citi Foundation and Living Cities’ City Accelerator Initiative to develop a more inclusive procurement process amid the pandemic.

Governments are in a singular position to develop and grow their communities by taking deliberative steps to identify and rectify systemic disadvantage. Through equitable procurement, expanded financial support, a streamlined application process for both economic assistance and contracting, and creative legislation designed to address changing consumer needs beyond the pandemic, governments can address inequities business owners of color have experienced both during and prior to the pandemic.


Since spring 2020, one of the most critical supports for small-business owners in the United States has been financial assistance, particularly Paycheck Protection Program (PPP) funding.

Goode obtained PPP funding for his business on two separate occasions, which helped him keep his company solvent. Similarly, Somera received PPP funding as well as local grants from her city of Long Beach.

But others have been unsuccessful in their attempts to acquire federal, state or local government funding. Michel, for example, received a few small grants from local artist organizations, but did not receive federal or state funding.

PPP funding, particularly in its first round, shut out many Black and brown entrepreneurs. While data on PPP recipients is limited because providing demographic information when applying is optional, the disparities in PPP loans are clear. Based on data from February 2021, of the 14 percent of businesses that identified their demographics on loan applications, white business owners received 83 percent of loans and Black entrepreneurs received 1.9 percent.

Part of this disproportionate favoring of white applicants is due to a long history of discriminatory banking practices. Business owners of color have historically been denied loans at a higher rate than white applicants, thereby limiting Black and brown business owners’ access to capital. During the first wave of PPP funding, many small businesses owned by people of color struggled to get approved by banks, which initially prioritized current and larger clients. The Small Business Administration eventually expanded the number of banks and non-bank lenders who could provide PPP funding, partially to increase applications for entrepreneurs of color.

Another reason some small-business owners of color have struggled to acquire government-funded supports during COVID-19 is because the first round of PPP funding favored business owners with employees. According to Brookings, approximately 96 percent of Black business owners are sole proprietors, compared with nearly 80 percent of non-Black-owned businesses. A history of disparities related to education and access to capital have contributed to limitations on the growth of businesses owned by people of color.

While sole proprietors can apply for PPP loans, they cannot include amounts they have paid to contractors in their payroll costs when applying for funding, leading to smaller loan amounts.

Michelle Rivera, owner of Hippie Girl Spa and Boutique in El Paso, is the sole proprietor of her company. She has team members who support the operation of her company, but they are defined by the government as subcontractors rather than employees.

As Rivera explains, because of the designation of her team as subcontractors, “my staff lost their jobs, and I lost the revenue they helped to bring in. Even though I had a successful business, I was not able to apply for the same level of assistance as other companies with designated employees.”

In response to these concerns, in February 2021 the federal government enacted a change to PPP funding that allows sole proprietors to receive expanded opportunities for funding.

Some cities have also expanded financial support for struggling businesses. For example, Pittsburgh’s Urban Redevelopment Authority has offered low-interest and interest-free microloans to small businesses, and lobbied state and federal authorities to increase funding for this aid. Similarly, both Kansas City and South Bend have allocated funding from their budgets to support small businesses reeling from the pandemic.


While navigating the various struggles associated with COVID-19, most small business owners have had little time to do the long, complex work of applying for financial aid.

“We are a small outfit,” says Michel. “We do not have federal grant writers on staff. While dealing with the obstacles of COVID-19, we do not have time to complete a 15 to 20-page application. The complexity of the process is dampening the spirit of entrepreneurship.”

Rivera went through the time-consuming process of applying for 17 separate grants and loans. In the end, she received two grants for a total of $7,500. While appreciative of the aid, she is frustrated by the time and effort she had to spend to receive these funds.

Both Michel and Rivera believe that a streamlined application process would help small businesses like theirs more quickly recover from the impacts of COVID-19.

Government has made some efforts to remove barriers related to complex application processes. In January 2020, the U.S. Small Business Administration developed a streamlined, one-page application for businesses to apply for forgiveness of PPP loans of $150,000 or less.

Some cities are considering ways to streamline another laborious element of business for entrepreneurs: procurement. Often, the procurement process can be time consuming and complicated, especially for busy sole proprietors.

Houston, Kansas City and Philadelphia have developed online hubs that streamline searches for city bids. Similarly, Pittsburgh and other cities have adopted DocuSign and other tools to make the city’s bid and certification process more streamlined and effective remotely.

Cities can look to these methods for ideas on how to streamline COVID-19 financial assistance applications and processes.


COVID-19 has compelled business owners to develop new, creative ways to support their communities while keeping their businesses afloat.

For example, while the BLCK Family’s in-person events are on pause, the organization is looking to rent a kitchen space to offer to local chefs who cannot afford the overhead of a brick-and-mortar restaurant.

“Many Black communities still live in food deserts. In fact, some studies have found Black Americans are nearly 400 percent more likely than white Americans to live in a neighborhood that lacks a full-service supermarket,” says Michel. “That is an important fight for us.”

Rivera has pivoted her boutique and spa to a solely online enterprise. She now sells products – including all-natural hand and mask sanitizers – to a national clientele.

“COVID has taught me to have a bigger vision,” Rivera says. “It is rewarding to expand my market to a national level.”

The pandemic is a catalyst for government to think of ways to support these entrepreneurs as they adapt their businesses to better serve their communities.

Legislation provides one opportunity. For example, local government in both Madison and Eugene developed programs to offer quick permits to restaurants that wanted to create streateries – improvised dining areas typically located in streets, parking lots and other public-use spaces. By expediting the permit process, small-business owners could more quickly welcome back customers and begin to recover economically.

Leveraging the buying power of city government is another way to support small business owners of color. The newest City Accelerator guide shares examples of how 10 cities implemented equitable measures for inclusive procurement throughout the COVID-19 pandemic — including providing remote and recorded technical assistance to business owners, creating funding avenues for all business sizes and streamlining the procurement process.

Business owners of color like Goode, Michel, Rivera and Somera have been creatively and intentionally serving their communities before, during and beyond the pandemic. By listening to the needs of business owners and thinking creatively themselves, local governments can develop policies and practices that help those business owners continue their important work of providing goods, services and jobs to local communities.
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