Even before the pandemic shook our industry to its core — Black-owned small businesses have struggled with disproportionate funding gaps, hindering their ability to receive the financial backing necessary to kickstart a successful business.
As our industry continues to battle with the taxing hurdles of a two-year-long global pandemic, Black-owned hospitality businesses need our collective support. In honor of Black History Month, and the contributions and influences BIPOC bring to the culinary industry — we want to highlight and bring awareness to a couple of organizations supporting Black-owned culinary businesses with financial and educational resources needed while navigating the pandemic and beyond.
First, let’s contextualize the funding gap impacting many BIPOC small businesses. According to data from a national Small Business Credit Survey from 2018, The Federal Reserve Bank of Atlanta reported that when applying for business loans, only 31% of Black-owned small business applicants received the full amount they applied for, compared to 49% of white-owned business applicants. Additionally, 38% of Black-owned business loan applicants were denied the full amount of funding they applied for, while only 20% of white-owned businesses were denied. While circumstances around an existing racial wage gap in the US, combined with bank lending practices are complex, it’s clear that even before the pandemic, BIPOC small businesses, many of which are in hospitality or retail, haven’t received equal access to the funds necessary to support a business.
Since the pandemic, another report with survey data performed by the Federal Reserve bank of New York showed that Black communities, and the small businesses within them, have been hit the hardest by the COVID-19 pandemic. The report examines the situations attributed to Black-owned businesses being “almost twice as likely to shutter as small firms overall” during the pandemic. Some of the findings were that the Paycheck Protection Program left significant coverage gaps impacting states and counties with the highest density of Black-owned businesses. Additionally, the report showed that “Weaker cash positions, weaker bank relationships, and pre-existing funding gaps left Black firms with little cushion entering the crisis,” the report states. “Even the healthiest Black firms were financially disadvantaged at the onset of COVID-19.”
This is just a small fraction of the building data depicting the reality and complexities that many Black entrepreneurs face when securing the financial capital necessary for their businesses to succeed. To help support businesses facing the systemic discrimination that exists in US financial institutions, we want to share two organizations working to support Black-owned small businesses with the funds and educational resources to succeed. Their work helps nurture the innovation, growth, and diversity that we know, love, and advocate for in the hospitality industry.
Feed the Soul Foundation
Feed the Soul Foundation, founded by Black Restaurant Week LLC, aims to provide resources to culinary entrepreneurs across the US from Black, LatinX, Indigenous, disabled, formerly incarcerated, LGBTQIA+, and other marginalized communities. Through their Restaurant Business Development program, Feed the Soul Foundation aims to impact over 50 restaurants nationwide each year to ensure that local neighborhood restaurants obtain financial assistance, educational training, and equitable opportunities. They also run a national Emergency Relief Fund to assist marginalized businesses in times of unexpected financial emergency.
To donate or help share their programs within your community — check out Feed the Soul Foundation here.
Rebuild the Block
Rebuild the Block is a non-profit organization serving as a liaison in connecting Black business owners with reputable resources to infiltrate generational wealth and capital in the Black community. Since its inception in 2020, Rebuild the Block has awarded 25 grants to 25 businesses across 12 states through their Small Business Relief Fund. As a non-profit organization, they aim to provide outreach and resources to the community and serve as a host to redistribute wealth and knowledge.
To donate or help share their program within your community — check out Rebuild the Block here.
This Black History Month and beyond, let’s help build back Black culinary businesses. We urge you to check out Feed the Soul Foundation and Rebuild the Block to share their work within your networks, and if it’s available to you, donate.