Black Owned Business Are More Likely To Fail During The Pandemic

A study done by the Federal Reserve Bank of New York shows black-owned businesses are most impacted by the pandemic. As a matter of fact, the brief said 41 percent of black businesses suffered an acute decline. The decline was more significant than any other group. Latinx business owners dropped 32 percent, Asian business owners 21 percent, and white business owners by 17 percent.

Black businesses are affected more because they are geographically concentrated. According to the study, black-owned businesses are concentrated to 30 counties in the country. This is only about 1 percent of all counties across the United States, 19 of the 30 counties had the highest number of positive COVID-19 cases.

The brief by the Federal Reserve Bank of New York also said weaker cash positions, weaker bank relationships, and preexisting funding gaps left Black firms with little cushion entering the crisis: even the healthiest Black firms were financially disadvantaged at the onset of COVID-19.

These are just a couple of the reasons that are currently affecting black-owned businesses during the pandemic in America. For the full brief click here

Source: NewYorkFed.org