The Impact of COVID-19 on minority-owned small businesses in the United States
Minority-owned independent companies are being disproportionately affected by the financial consequences of the COVID-19 closures yet are offering us a preview of their resourcefulness and how US organizations must adjust in the wake of the pandemic. These organizations are exploring different possibilities regarding better approaches for attempting to guarantee their employee’s wellbeing, offering financial relief to workers and network individuals, and presenting new administrations.
According to a McKinsey & Company survey of over 1,000 independent companies nationwide, 40 percent of minority-owned private ventures have added new administrations to help their communities and workers, contrasted with 27 percent of all respondents. This exemplifies the need for individuals to support small minority-owned businesses in order to help build community resilience. In addition, the amount of working African American entrepreneurs in the United States plunged over 40 percent as the coronavirus shut down a great part of the economy — a far more extreme drop than other racial allies experienced.
The Washington Post stated the closures and social distancing guidelines to slow the virus’s spread have caused significant damage across racial assemblies, with the absolute number of dynamic entrepreneurs dropping 22 percent from February to April. In any case, minority-owned organizations have suffered disproportionately in a crisis that’s also killing nonwhite Americans at higher rates and eliminating more of their jobs. Small-minority owned businesses face greater challenges of accessing credit during an average year and this has also been exacerbated by the pandemic. Based on data from the 2018 Small Business Credit Survey, it was found that large banks approve around 60 percent of loans sought by white small-business owners, 50 percent of those sought by Hispanic or Latinx small-business owners, and just 29 percent of those sought by black small-business owners.
ABC News mentioned that COVID-19 has lopsidedly affected black Americans, tainting them at higher rates across the country. Be that as it may, specialists state the pandemic has additionally exacerbated existing financial differences and raised new worries about the endurance of black organizations. They also stated that “black-owned businesses will struggle to withstand another wave of economic uncertainty, following decades of inequity that made it hard for many to flourish in the first place.” As a result, it is important that individuals try to spend money at minority-owned businesses, rather than large corporations, during reopening to support and build resilience in communities with African American, Hispanic, or Lantin entrepreneurs. If you’re looking to support these businesses, you can check out these curated lists of minority-owned businesses in cities such as Boston, New York City, and Los Angeles.
Sources and Further Reading:
- COVID-19’s effect on minority-owned small businesses in the United States
- Black businesses hit hard by COVID-19 fight to stay afloat
- Number of working black business owners falls 40 percent, far more than other groups amid coronavirus
- Boston Area Minority Based Businesses
- 138 Black Owned Businesses to Support
- Black Owned Businesses in LA