Richmond Small Businesses Face $5 Billion Capital Gap, With Less Capital Going To Black and Hispanic
As Richmond- based small businesses continue to recover from the COVID-19 pandemic, a new report has identified a historic, unmet annual demand of approximately $5 billion in capital for small businesses in Richmond, contributing to significant disparities in business ownership and growth for businesses owned by people of color.
Community-informed research suggests that direct investment and focus on four strategies –building the ecosystem of small business support organizations, tailoring small business support to meet current needs, and increasing access to flexible capital for businesses owned by people of color, and expanding business growth opportunities–
"In our communities, we hold certain truths to be self-evident but with this report, we have documentable, quantifiable, and unquestionable support that our Black and Brown business owners are underserved,"
The research, funded by JPMorgan Chase and conducted by Next Street (https://nextstreet.com/
Full report: Richmond Small Business Ecosystem Assessment Full Report (https://nextstreet.com/
The Greater Richmond region is home to approximately 74,000 non-employer sole proprietorships. These small businesses and sole proprietors account for 35% of the local workforce. However, while Black and Latino residents make up 29% and 7% of the Greater Richmond population, business ownership is only 5% and 2% respectively.
The COVID-19 pandemic has only magnified these disparities. In the city of Richmond, the number of small businesses open decreased by 1% from January 2020 to January 2021. However, despite most Richmond businesses remaining open, total small business revenue decreased by 28% over the same period. Meanwhile, the number of business closures has been more significant in the surrounding counties of Chesterfield, Hanover, and Henrico, with nearly a quarter of businesses, temporarily or permanently closed in January 2021 compared to a year prior. Comparable to the city, total revenue for small businesses located in the outer counties decreased by 18% to 39% during the same period