The Path forward
The Minority Business Development Agency (“MBDA”) in the Chamber of Commerce is the only federal agency tasked with promoting the growth of minority-owned businesses. The MBDA operates 50+ regional offices around the country and has outlined several paths to help minority owned businesses thrive in America:
👀 Conscious efforts to invest more capital - Black business owners get loans that are 60% smaller than their White counterparts yet have to pay much higher interest rates on those loans. Organizations like Harlem Capital, Blck VC, Visible Hands, and Base10 are doing tremendous work to help invest in minority owned businesses and recognize the adverse challenges that minority founders may face. Harlem Capital’s $174M fund and Base 10’s $1B in AUM have helped black founders attain the capital to start their businesses.
📝 Federal contracting as a source of funding - In 2020, the federal government awarded $145B in federal contracts, however, 96% of that was distributed to large White-owned businesses. This number has barely changed from 5 years earlier. The 1997 Small Business Reauthorization Act mandates that the federal government award 23% of its federal contracts to small businesses, but nothing similar exists for how funding should be distributed to minority-owned businesses. As part of the MBDA mandate, the agency can ensure that percent-targets are set for federal contracting awards for minority-owned businesses
🔖 Bookmark this list - New York Magazine created a list of 198 Black-owned businesses that you can support by buying their products. Your dollars make a difference and our choices are one of the strongest tools we have. In many cases, these lists have proven to 8x the revenue of these listed businesses. While the problems of supporting Black businesses are deeply endemic and require structural federal, state, local, and private sector changes - that change can start with your choices and consumer spending choices.