• Racial inequities in business revenue tend to be more severe among firms with paid employees than among sole proprietorship.
• Among firms with paid employees in 2018, average annual revenues for white-owned firms are about 2 times higher than for Asian-, Latinx-, and Black-owned firms.
• Average annual revenues among Black- and Asian-owned firms with paid employees in 2017 were highest in the manufacturing and wholesale trade industries; they were highest in wholesale trade and management for Latinx-owned firms, utilities and management for Native American-owned firms, and utilities and wholesale trade industries for white-owned firms.
• Women-owned firms with paid employees had average revenues of about $1.5 million in 2017 compared with $3.2 million for men-owned firms. Among sole proprietorships, those owned by women had average revenues of $27,600 while those owned by men had average revenues of $57,400.

People of color are less likely than white people to have access to capital and contracts to start and grow a business, due in part to historical policies such as redlining that denied home loans and wealth-building opportunities to people of color. Today, business loan denial rates for firms owned by people of color are more than twice as high compared to white-owned businesses Business owners of color also pay higher interest rates and receive lower loan and equity investments. During the shelter-in-place phase of the Covid-19 pandemic, racial discrimination among lenders prevented many entrepreneurs of color from accessing paycheck protection program loans. Underrepresented groups also often face barriers to accessing important networks and training programs for maintaining a successful business.

• Create dedicated technical assistance and business supports for underrepresented entrepreneurs in high-growth, innovation sectors.

• Direct economic development efforts to support the growth of existing businesses that provide jobs for low-income residents.

• Help growing companies owned by underrepresented entrepreneurs access affordable office and commercial space.

• Ensure underrepresented entrepreneurs have access to business opportunities created through public sector spending, anchor institution spending, and the supply chains of major corporations.

• Implement workforce development strategies that train youth and low-wage workers for jobs in growing companies and business sectors.

• At the federal level, target small and very small businesses in federal investment programs and set aside a share of public contracts for businesses owned by people of color to mirror area demographics.

• Ensure that Covid-19 pandemic recovery efforts center racial equity as a core concern in supporting local economic growth.

• Reports: The Future of Banking: Overcoming Barriers to Financial Inclusion for Communities of Color; The Color of Entrepreneurship; Getting Entrepreneurs of Color Access to the Tools of Success
• Data: Prosperity Now Scorecard; Federal Financial Institutions Examination Council: Census & Demographic Data