Black businesses saw a boom under the Biden-Harris administration. Will they thrive under Trump?
“Small businesses we know are such a major part of the backbone of wealth development for Black communities [and] for Black families,” U.S. Rep. Yvette Clarke, D-N.Y., told theGrio.
In the final months of the Biden-Harris White House, the administration is touting significant gains for Black businesses over the past four years and working to ensure the successes will be cemented when President-elect Donald Trump and his administration take office.
Isabel Guzman, the administrator of the Small Business Administration, told theGrio that the federal agency is working to “ensure that the legacy of Biden-Harris administration and these incredible reforms are stabilized and implemented and that we can see these gains into the future for all of us.” She added, “It’s the benefit of our entire economy.”
Last week, the SBA celebrated a record number of business applications during President Joe Biden and Vice President Kamala Harris’ tenures — more than 20 million, the most in any single presidential term in U.S. history.
While it’s unclear how many of those 20 million businesses were Black-operated due to how the federal data is collected, the White House noted that the number of Black households (5% to 11%) and zip codes with predominantly Black populations that reported owning a small business had seen notable gains.
“There’s been some research that shows that small business applications have increased 198% in those districts where at least 75% of the residents identify as Black,” said Guzman, who added, “It has been an incredible boom of Black entrepreneurship.”
A similar boom has occurred among female-owned and other people of color-owned businesses.
Administrator Guzman noted that post-pandemic business growth has been sustained over the past few years and, in some cases, has seen considerable expansion in terms of geographical location and the kinds of businesses being operated.
“We see a continued surge of technology-related businesses, and this includes digital e-commerce … increasingly doing their businesses online and really pushing the envelope there, as well as we saw trends of people geographically moving outside the city centers and into other communities,” Guzman shared.
Those “high-propensity businesses,” she noted, means they’re “more likely to create jobs.”
Gains for Black businesses aside, they only make up 3% of all U.S. firms despite Black Americans making up 14% of the overall population, according to Pew Research. By comparison, enterprises owned by white Americans make up 85% of all businesses. As a Brookings Institution report points out, at the current growth rate, it would take Black businesses 256 years to reach parity with the overall Black population.
“Realistically, these growth rates are well behind a pace that could ameliorate racial disparities in employer-firm ownership anytime soon, and large structural barriers across the economy — not least of which is the racialized nature of investments in place — continue to undermine transformative change,” said the Brookings report. “Given that many of these disparities are structural in nature, the solutions must be as well.”
The report’s authors emphasized a need for “structural changes in federal funding and philanthropy.”
The Biden-Harris administration endeavored to increase the number of Black businesses receiving government contracts, which are lucrative but notoriously difficult to secure. Administrator Guzman told theGrio there was an increase of nearly $1 billion in government contracts for Black businesses while Biden and Harris have been in office.
The SBA has also implemented reforms like simplifying certifications and protecting the 8A program, which provides training and federal contracting for socially and economically disadvantaged small business owners.
Despite the noticeable gains for Black businesses under the Biden-Harris administration, there are concerns about what a second Trump administration would mean for them in the coming years.
In addition to his incoming administration’s hostility toward racial equity work, Trump’s first term in office was criticized over the SBA’s management of its PPP loan program during the COVID-19 pandemic. In addition to there being many instances of fraud, Black and brown businesses disproportionately failed to benefit from the loan forgiveness program.
“Small businesses we know are such a major part of the backbone of wealth development for Black communities [and] for Black families,” U.S. Rep. Yvette Clarke, D-N.Y., told theGrio.
Congresswoman Clarke, who sits on the House Energy and Commerce Committee, said any “abrupt change in policy” as it relates to closing the racial gaps in small businesses would cause Black businesses to “wither on the vine just when they’re growing.”
“We’re going to have to make sure that there’s equal application of the law to all small businesses and that, again, Black communities don’t pay a price for an administration that is … vindictive,” said Clarke.
Guzman said President Biden “has been clear that diversity is our strength in this country,” said what the SBA has done “foundationally” has set a “standard from which we can continue to build,” including a tripling of federal lending to Black businesses as a result of of the administration’s “historic reforms in capital access.”
“As long as those changes are not reversed,” she said.
More About:Politics
You Might Like
