PIEDMONT – Many of North Carolina’s diverse businesses closed at the start of the COVID-19 pandemic, and sadly, a disproportionate number of these businesses did not reopen, found a December 2020 ResilNC report studying the impact of COVID-19 on the state’s black-owned businesses.
The organization, an initiative of Partners in Equity, is among the organizers of the Black Business Forum, which will be held virtually on Friday, and aims to use the event as one vehicle to advocate for an exchange of value and resources.
“Friday, June 25th is set to be a day full of thoughtful insights, quality connections and timely opportunities to better position our black business ecosystem, and Main St more broadly, for growth,” said Napoleon Wallace, a founding partner of Partners in Equity and a co-founder of ResilNC in an interview with WRAL TechWire.
The half-day event, which according to the registration website will cover topics like access to capital, how to sell to government and corporate supply chains, and the state of play for underrepresented entrepreneurs in North Carolina, is co-organized by the North Carolina Department of Administration’s Office of Historically Underutilized Businesses, and the State of North Carolina.
ResilNC partnered with 10 community-based organizations to gather data on more than 250 black-owned businesses, diverse across geography and industry sector and presented their findings in the December 2020 report.
Among the findings: the number of black-owned businesses in North Carolina decreased by 41 percent since the onset of the global coronavirus pandemic.
Additionally, 86% of those surveyed reported that their business was adversely affected by the pandemic. A third-party firm conducting a study for ResilNC found 91% of respondents noting their business was adversely affected by the pandemic.
The report referenced a prior report from the Federal Reserve Bank noting the weakened financial position and lack of strong banking relationships as contributors to why black-owned businesses were underrepresented in the Paycheck Protection Program (PPP), and that owners were less likely to apply due to a belief they would be denied.
Beyond these findings of racial disparity, ResilNC found that this will likely exacerbate the racial wealth gap, noting that in North Carolina, of the $12.3 billion in total state-wide PPP lending, $3.8 billion was made to small- to medium-sized businesses (loans up to $150,000), and of that, only $17 million (0.44 percent) went to businesses identified as Black or African-American.
“Debt funding is necessary, but insufficient to help businesses grow. Black businesses need access to patient, friends and family style equity that can propel them forward instead of weighing them down, but in modest wealth communities, that equity is harder to come by,” said Wallace.
Yet work is being done, said Wallace, and there are initiatives that are working to increase equity in this area.
“Groups like Historic Westend Partners in Charlotte and Genesis Block in Wilmington are acting as a catalyst to address community capacity and the development of local assets,” said Wallace. “Firms like Piedmont Business Capital are implementing a thoughtful approach to the trusted advisor model that invests time, not just money, into their clients.”
Then, there’s Partners in Equity itself, said Wallace, which works in partnership with lenders like M&F Bank and Self-Help Credit Union, which are working to assist businesses in accessing the flexible growth capital they need to fuel their companies. Finally, said Wallace, the ZSR Community Progress Fund and the NC IDEA Black Entrepreneurship Council have invested in building a black business ecosystem that could accelerate black businesses during, and after, a period of economic recovery in the wider economy.
The firm’s follow-on report in January noted that prior to the pandemic, black entrepreneurship was increasing, yet the disparities that exist still narrow the pathway for employee and revenue growth for these firms compared to others.
The report recommends four pathways to build more responsive black business ecosystems in North Carolina, including the expansion of investor networks to encourage investment and reinvestment in black entrepreneurial ecosystems, tailored incubators and accelerator models, investor-led training programs that include life investment advisors, and the connection of legal and financial firms with black entrepreneurs and business owners within coworking, incubator, and small business programs, including the extension of pro-bono services, to these firms and their founders.
