Black/African American women-owned businesses make significant contributions to the economy and are key to driving small business growth.
In fact, according to the Wells Fargo 2024 Impact of Women-Owned Businesses Report, between 2019 and 2023, Black/African American women-owned businesses saw average revenues increase 32.7%, compared to 12.1% for all women-owned businesses. In spite of this impressive growth, systemic disparities in funding and mentorship opportunities persist. Fortunately, new programs are addressing these gaps.
Funding Opportunities
Financing is central to any business venture, but research shows that women of color receive less than 0.2% of venture-capital funding. With about 61% of Black women entrepreneurs self-funding their businesses, they exhibit higher levels of debt, facing an unfair disadvantage from the start.
New bank and philanthropic programs are helping Black women identify capital opportunities to build sustainable small businesses. In addition to traditional lending, working with Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) can create an ecosystem of support that provides additional avenues to accessing capital. These institutions specifically work with underserved entrepreneurs, including those in low-to-moderate income areas and minority populations.
Supporting these organizations and their mission was at the heart of the creation of initiatives like Wells Fargo’s Open for Business Fund, an industry-leading effort that has donated roughly $420 million to nonprofits serving small businesses; the Small Business Resource Navigator, an online portal connecting small business owners to potential financing options and technical assistance through CDFIs; the Capital Pathways Workbook, a free resource that helps entrepreneurs map their capital needs to business goals and objectives; and a Wells Fargo-backed $70 million fund in partnership with Hello Alice to improve access to credit and capital for underserved entrepreneurs.
These programs are helping to dismantle financial barriers and build an environment where Black/African American women-owned businesses can scale, grow and build for the future.
Harnessing Mentorship
Beyond funding, the success and sustainable growth of a small business relies on guidance and community support. That’s why it’s so important to invest in education and mentorship programs specifically designed for Black/African American women entrepreneurs. This level of support is at the heart of Milestone Circles, a mentoring program for women entrepreneurs offered by the Nasdaq Entrepreneurial Center and funded by the Wells Fargo Foundation. The majority of participants (86%) have been Black, African American and/or Afro-Caribbean, and have learned skills to improve their business alongside fellow entrepreneurs.
As Black/African American women continue taking the lead in business ownership, the banking and business community can take steps to support their momentum, paving the way for their sustained growth and helping make generational wealth an attainable goal for all.
By: StatePoint
