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The Inclusive Economy

Building the Financial Resilience of Entrepreneurs of Color in the South

By Lauren Williams on 03/03/2016 @ 09:30 AM

Tags: Entrepreneurship, News, Racial Wealth Divide

Today, we’re excited to launch a new research-driven initiative—Toward Financial Resilience for Entrepreneurs of Color—to explore and address financial vulnerabilities facing entrepreneurs of color in the South. Over the next year, with the support of Capital One, we’ll be reflecting on decades of work by organizations aiming to serve entrepreneurs; interviewing experts for their insights; and working directly with entrepreneurs of color in the South to gain a deep understanding of their experiences and needs. This information will put us on the pathway to designing solutions that meet the needs of these entrepreneurs, and to get started on the right foot we need your help.

Are you or someone you know working with entrepreneurs of color in the South who experience cash flow volatility or inconsistency? Do you offer solutions to help address those challenges? We want to learn from your experiences! Please tell us what you think we should know.

So far, we know that cash flow difficulties among low- and moderate-income business owners are pervasive and severe, and that cash reserves are incredibly low. In communities of color—especially those facing persistent poverty—business owners are less likely to have liquid reserves, other household assets or credit to draw on in the event of a cash flow gap. Among business owners of color, both the depth and breadth of the racial wealth divide and the dearth of safe, affordable small business credit options amplify the dangers of cash flow inconsistency and make the endeavor of launching a small business even riskier than it should be. In every state, the value of businesses owned by entrepreneurs of color is generally far less than that of businesses owned by white entrepreneurs. This disparity is most pronounced in Southern states, including Mississippi, Alabama, Georgia, North Carolina, South Carolina and Tennessee. In Mississippi, for example, white-owned businesses are valued at over eight times the value of businesses owned by people of color.

To avoid reinventing the wheel, CFED will start this project by spending the next few months—from now through May—interviewing experts on these issues. Then, we’ll get the story from business owners themselves during visits to communities in the South between June and July. During these trips, we will conduct in-depth, qualitative interviews with entrepreneurs. Only then will we begin to explore pathways to building solutions.

Want to contribute to the conversation? Please email Lauren Williams, CFED’s Associate Director of Entrepreneurship, at


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