Why supporting Black entrepreneurship matters
Addressing issues of inter-generational wealth, structural barriers and anti-Black racism faced by Black-led businesses and entrepreneurs will enhance the well-being of Black communities and make a positive and lasting contribution to Canada's overall economic development.ISTOCKPHOTO / GETTY IMAGES
A critical driver of creating intergenerational wealth is the support for Black entrepreneurs and Black-owned businesses. Currently, according to Statistics Canada, Black people represent only 2.4 per cent of all business owners, despite representing 4.3 per cent of the population. Of these businesses, 33 per cent are owned by women, compared to only 20 per cent among the general population.
While all entrepreneurs face challenges, study after study illustrates that Black entrepreneurs – and even more so Black businesswomen – are disproportionately burdened by systemic barriers, prejudice and limited access to resources, making their journey in business considerably more arduous. In one survey of Black entrepreneurs, 76 per cent said that their race made it harder to succeed; 75 per cent said that if they needed to find $10,000 to support their business, it would be difficult for them to do so; and only 19 per cent of respondents said they trust banks to do what is right for them and their community.
The Federation of African Canadian Economics (FACE) aims to address the issues of intergenerational wealth by improving access to capital for the Black community through the Black Entrepreneurship Loan Fund (BELF), an initiative created by the Government of Canada in partnership with organizations serving the Black community. Tiffany Callender, co-founder and CEO of FACE, emphasizes the formidable obstacles Black entrepreneurs face in Canada, particularly Black women. To date, FACE has approved over $40-million in loans for Black-owned businesses across Canada. “By addressing these financial disparities, supporting underserved Black business owners enhances the well-being of Black communities and makes a positive and lasting contribution to Canada’s overall economic development,” she said.
Successful entrepreneur Nadine Spencer, founder and CEO of BrandEQ, serves on the board of FACE. As the former CEO of the Black Business and Professional Association (BBPA), she championed the importance of research to reveal barriers and shape programs. A 2020 BBPA study showed Black-owned businesses, which tend to be smaller, under-financed and in the services sectors were twice as hard hit by COVID but half as likely to be able to take on additional debt.
The largest Canadian study to date of Black women entrepreneurs indicated that some were pulled to entrepreneurship by new opportunities, while others were pushed because of barriers and anti-Black racism in employment. The Rise Up study showed that Black women entrepreneurs face barriers to financing including the cost of borrowing (78.5 per cent and 74.7 per cent respectively). The overwhelming majority of Black women business owners surveyed used personal financing (81.4 per cent).
“Black entrepreneurs are starting in a different place than others and so need different and tailor-made supports,” says Spencer. “Trust is an important foundation, and that is why organizations like the Black Business Professional Association and FACE are so important in helping meet them where they are.”
Nadine Spencer (left) is the CEO and founder of BrandEQ, and Tiffany Callender (right), is co-founder and CEO of FACE. Clive Sewell
Building on the Rise Up initiative and her proprietary “Boss Women” program, Spencer also worked with the Future Skills Centre and the Diversity Institute to develop a host of evidence-based programs including Black African and Caribbean Entrepreneurship Leadership (BACEL), which has served more than 1,200 diverse Black entrepreneurs.
“The preliminary results are encouraging,” says Spencer. ”A big part of helping them succeed is not teaching the language or the skills or how to do a business plan or financial projections – although those are important – but how to navigate the ‘unspoken rules’ to build networks and connections,” she adds.
“Mentorship is key.” BBPA was also part of the FSC Capital Skills program, which had a laser focus on helping investment-ready diverse entrepreneurs get access to financing whether through loans, grants or procurement opportunities.
As reported by the Diversity Institute, a critical piece to supporting Black entrepreneurs lies in showcasing successful Black entrepreneurs such as billionaire Michael Lee Chin or BlackNorth Initiative founder and Dragons’ Den co-star Wes Hall, or Brittany Forsyth, founding partner of venture capital firm Backbone Angels. Every year, BBPA’s Harry Jerome Awards celebrate Black success in all its forms and shine a spotlight on thriving Black business people – from Denham Jolly, BBPA founder, author, human rights activist and philanthropist, to Cheryl Kerr, owner of Medex, a multi-million-dollar full-service rehabilitation and home healthcare company because “If you can’t see it, you can’t be it.”
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To view the full report as it appeared in The Globe's print edition Black History Month