According to the Pew Research Center, white households have 13 times more wealth than African American households and 10 times more than Hispanic households. Many factors contribute to this gap, including lower rates of asset ownership among minorities (such as a home or stocks) and the history of discrimination and segregation in the US. For entrepreneurs, the racial wealth gap has negative impacts on business success, since lower levels of family wealth mean that entrepreneurs of color have less start-up capital to invest in their businesses. Additionally, research from the ASPEN Institute shows that Black and Hispanic entrepreneurs have less access to business loans and professional networks compared to white business owners.
Despite these barriers, entrepreneurs of color contribute significant growth to the US economy. According to a recent study from the Center for Global Policy Solutions, the number of these businesses increased between 2007 and 2012, despite the Great Recession’s impact on many industries. Though only a fraction of small businesses hire paid employees, those that do are predominantly owned by people of color. Between 2007 and 2012, 72% of new small business jobs were created by POC.
Bridging the Gap for Seattle Entrepreneurs
Ventures served 756 individuals last year, 67% of whom were people of color and 69% women. We strive to be culturally competent and meet clients where they’re at—both in business and in their personal lives. That includes recognizing the effects of the racial wealth gap and providing opportunities for all business owners to succeed, such as:
- Providing access to capital through our loan program, including a credit-building loan that helps borrowers quickly build up a credit score or repair a low score.
- Launching retail and food incubator programs to provide access to markets.
- Offering Spanish trainings for Latino entrepreneurs, who make up 30% of our clients.
- Working with dedicated volunteer coaches and instructors, who bring industry knowledge and access to professional networks.
Entrepreneurship is a tough road. It is full of risk and uncertainty but also hope that business ownership will lead to a better financial future. In supporting entrepreneurs of color, we unlock huge economic potential that positively affects us all: increasing more families’ wealth, lowering the unemployment rate, and contributing to vibrant neighborhood economies.