Canada’s Black female entrepreneurs play a substantial role in creating products and services that celebrate their culture and contribute to their communities but still face significant barriers to accessing finance a new report has found.
Rise Up: A Study of 700 Black Women Entrepreneurs, the largest study of its kind ever conducted in Canada, explores the impact that the COVID-19 pandemic has had on the businesses of Black women entrepreneurs which previous research has shown were harder hit and less likely to have access to support.
The research, published by the Black Business and Professional Association (BBPA), Casa Foundation for International Development, De Sedulous Women Leaders and researchers from the Women Entrepreneurship Knowledge Hub (WEKH), found that more than one third (34%) of Black women entrepreneurs questioned reported that their orders and/or events had been affected as a result of the pandemic and one in five (21%) indicated that their supply chain is impacted.
Three-quarters of business owners were operating online (78.8%) with almost half (47.3%) indicating COVID forced them to pivot online. However, the access to finance needed to adapt their businesses and help support them through the pandemic was often lacking.
Over 78% percent of those questioned said that access to financing was an issue. A further 74.7% said that the cost of borrowing was a significant barrier.
More than one quarter didn’t know where to get help for their business and the overwhelming majority of entrepreneurs surveyed used personal financing (81.4%) to support their businesses while 22 percent used government loans, grants, or subsidies.
However, despite the difficulties, the report found that many Black Canadian female entrepreneurs felt inspired to start a business so that they could celebrate Black/African/Caribbean culture and address the race, gender, and class inequalities they faced in society.
The report argues for the promotion of policies that support Black women entrepreneurs, including targeted investments, procurement, access to micro-grants, skills development programs, and coaching initiatives tailored to their needs.
The report’s authors also argue for more funding and networking opportunities to be available to young Black women entrepreneurs in the early stages of business development to strengthen their skills and knowledge at inception. And within incubators and accelerators, increase the number of Black mentors, advisors, and staff and approaches tailored to the needs of Black women.
Nadine Spencer, an entrepreneur and president of the BBPA told wealth professional: “The importance of this report can’t be overstated. It provides us with an opportunity to better understand the issues that Black women entrepreneurs are facing and shows that we must increase our support of this population as we look at Canada’s economic recovery.”
She added: “It also shows the incredible resourcefulness, resilience, and innovation of Black women entrepreneurs.”
Dr. Mohamed Elmi, Director of Research, Diversity Institute said: “There are new supports that offer hope: the Government of Canada is investing in targeted support through its new Black Entrepreneurship Program, for example. We also need to address bias in the ecosystem.
“We pour billions of dollars into our tech-oriented innovation ecosystem, which is justified because tech is potentially high growth. But businesses in other sectors – services, culture, food, retail – also create and sustain jobs, families, and communities.”