NEWS

Black Entrepreneurs Still Face Hurdles To Opening Their Own Businesses

Megan Ulu-Lani Boyanton
The Denver Post

WWR Article Summary (tl;dr) “Black individuals represent almost 13% of the U.S. population, but only 2.4% of American businesses are run by Black owners, according to the study. Matt Schulz, LendingTree’s chief credit analyst, described it as “obviously a significant gap.”

Denver

When Courtney Samuel, who was born and raised in Denver, recalls adolescent memories with his father, he thinks of construction.

As the younger Samuel cleaned the sites, his dad managed the construction work. The elder Samuel’s company eventually helped build the Blair-Caldwell African American Research Library — the public library in Five Points, one of the capital city’s historically Black neighborhoods.

Samuel didn’t know then that, blocks away, he’d open his own business one day: Bodies By Perseverance, a fitness gym that offers personal training, boxing and more, which celebrated its 18th anniversary in November.

“Any entrepreneur has to have perseverance, and that’s what I named my company,” said Samuel, who now serves as his father’s caretaker.

Following his football career and a stint as a network engineer, Samuel made a decision in his early 20s to start a gym. However, loan requirements were tougher than he imagined, and he was turned down by the bank. Instead, Samuel borrowed against his 401(k) plan to launch his business.

He noted that, while “any small-business owner is going to have trouble getting loans,” entrepreneurs of color can run into an extra hurdle. They’re often unfamiliar with available loan programs because they aren’t “invited into a lot of those rooms” where relevant discussions are happening, Samuel said.

A recent LendingTree study ranks Denver as one of the 10 U.S. metropolitan areas with the lowest percentage of Black-owned businesses, which “doesn’t come as a shock” to Samuel. The Mile High City is No. 6 on that bottom 10, tied with Boston. Out of almost 70,000 businesses in the Denver area, only 999, or 1.4%, are Black-owned, the report determined after analyzing U.S. Census Bureau data. About 6% of the Denver metropolitan area’s population identifies as Black, it adds.
Pittsburgh, Pa., was identified as the metropolitan area with the lowest percentage of Black-owned businesses at 1%, while Fayetteville, N.C., topped the list at 11.2%.

The 10 areas with the highest percentages of Black-owned businesses were mostly concentrated in the South, with larger Black populations ranging from 48% in Memphis, Tenn., to 18% in St. Louis, Mo. Alternatively, the 10 areas with the fewest Black-owned businesses claimed smaller Black populations that made up less than 10% of the general population, with the exception of Milwaukee at 16%.

Black individuals represent almost 13% of the U.S. population, but only 2.4% of American businesses are run by Black owners, according to the study. Matt Schulz, LendingTree’s chief credit analyst, described it as “obviously a significant gap.”

In terms of Denver’s performance, its “Black population is smaller than a lot of the other cities that we looked at,” compared to the overall population of the metropolitan area, Schulz said in a phone interview. Because of that, “there’s actually less of a disparity between the Black population in Denver and the percentage of Black-owned businesses.”

Still, business owners, like Jesse Brown and Harsha Maragh of Denver’s Wah Gwaan Brewing Company, continue to deal with barriers, including access to funding.

“I’m very disappointed with the access to capital here in the city, especially a city that has a great deal of diversity,” said Brown, a Denver native and U.S. Marine.

“Getting funding for our brewery was a huge hurdle, and it still is,” said Maragh, a first-generation Jamaican-American. The brewery’s name, “wah gwaan,” means “what’s up” in Jamaican Patois. Maragh aims to share her culture and “bring a little bit more diversity to the industry” through their business, she said in a phone interview.

Brewery owners are typically white men, with the Brewers Association reporting that almost 94% of owners identify as white and about 76% as male, according to a 2021 survey of 500 random breweries.

“There needs to be more support and more investment and more love shown to Black-owned breweries and Black-owned businesses in general, even when it’s not February,” which is Black History Month, Maragh said.

But access to capital isn’t solely a problem for Black entrepreneurs, said Lee Gash-Maxey, executive director of the Colorado Black Chamber of Commerce.

“Black, brown, Asian businesses — everybody needs more capital to run their businesses,” she said in a phone interview. “Any programs that help increase the capital for small Black businesses, we should take a look at.”

She pointed to two initiatives spearheaded by CBCC to give Black entrepreneurs more opportunities. The first partnership with Colorado Enterprise Fund, a nonprofit lending institution, established a specific Black business loan fund, which is geared toward Black-owned small businesses, Gash-Maxey said. The second partnership is with the University of Denver’s Daniels College of Business that resulted in the “Building Success” program, a six-session training program that helps participants learn about business models, marketing, financial management and more.

The Colorado Black Chamber of Commerce also gained “more members than they have in the last five years” in 2021, she added.

Lorena Zimmer, who oversees special initiatives at the Denver Metro Chamber of Commerce, called small-business starts and growth for Black and Latino residents “one of our top priorities” at Prosper CO. Launched in 2019, the joint initiative between the chamber, Metro Denver Economic Development Corporation and Denver Metro Chamber Leadership Foundation works to identify and solve economic barriers, particularly for women and people of color.

The community and nonprofits informed Prosper CO that the areas most in need of improvement include access to financial capital, markets and social capital, which consists of community networks and relationships that lead to potential buyers and mentors, Zimmer said. She mentioned one project to meet those needs that’s under development: an online marketplace for businesses owned by Black, Indigenous, and people of color to list their information, which will help larger companies more easily buy from them.

“We’re on our way to building a really strong ecosystem of support for our Black entrepreneurs,” Zimmer said. “This is a community that wants to be more inclusive and more diverse by setting up more equitable systems.”

As for access to capital, “there is money available,” said China Califf, director of the Denver Metro Small Business Development Center, but acknowledged that “navigating what’s available to you, and then applying for the right things and having everything you need to do so, is the barrier in a lot of cases.”

Distributed by Tribune Content Agency, LLC.

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