Research: Black Business Owners Face Significantly More Challenges

New reaserch

October 16, 2020//-Black business owners face significantly more challenges in starting, maintaining and growing their businesses than their white counterparts, according to new research from Goldman Sachs’ 10,000 Small Businesses program, which analyzed more than 10 years of data from approximately 9,700 program graduates.

Key findings include:

Capital Constraints. The rejection rate for Black business owners applying for bank funding was three times higher (27%) than the rejection rate for white business owners (9%).

Of those with household incomes of $75,000 or less, fewer than one-third of Black entrepreneurs received bank funding compared to almost two-thirds of white business owners.

Education Doesn’t Equalize. While Black women were the most highly educated among survey participants—with more than 86% having at least a college degree—their median revenue was less than half that of white men, generating only 47 cents for every dollar collected by a white male business owner.

Double Bottom Line. Black business owners in the sample have a bigger ripple effect, with 52% of Black entrepreneurs serving in a community leadership role (versus 40% for white business owners) and 74% serving as a business mentor to a member of the community (versus 50% for white business owners).

Goldman and Sachs 

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