Our current economic recovery seems to be for real, but, for many African American entrepreneurs, the road back will be long and difficult. An excellent–and depressing–series in the latest (March 23-29,2012) issue of Washington Business Journal (WBJ) examines how African American entrepreneurs have fared during and since the Great Recession. You can access the series here (Note: Some of the content is for subscribers only).
WBJ reporters took a deep dive into data on Small Business Administration (SBA) lending to African American businesses in the Washington DC metro area and the stats make for depressing reading. Some samples:
- 44% of loans made to black-owned businesses between 2003 and 2008 have defaulted.
- Current lending levels to black-owned businesses have plummeted. The number of loans made in in FY2011 was 87% down from 2007.
- Meanwhile, the value of these loans was down 71%.
The research found that a smaller slice of SBA dollars are now going to black-owned firms in the DC metro ara. In 2007, these firms received 21.1% of local SBA loan dollars. Today, that share has dropped to 6.3 percent. Lending to all other ethnic groups is on the rise, while lending to black-owned businesses remains stagnant.
The series looks at a number of proposals for addressing these challenges, but, regardless of how policy makers respond, observers agree that the pathways back to prosperity will be long and hard.