The vast majority of Black women who are entrepreneurs in Canada say they face significant barriers to financing, including the cost of borrowing, a study has found.
The report released by the Black Business and Professional Association on Thursday looked at how the COVID-19 pandemic has affected Black female entrepreneurs who have been harder hit and less likely to have access to support.
Nadine Spencer, president of Black Business and Professional Association, said the pandemic has put many businesses in jeopardy, adding to barriers like systemic discrimination and anti-Black racism that Black female entrepreneurs already face.
“Systemic discrimination, anti-Black racism – they’re not new, but the report really points to that coupled with the pandemic, the challenge of things like childcare, it’s put many businesses in jeopardy,” she said.
“Women do have a tougher go at it, and black women even more so.”
The study found that 78.5 per cent of respondents agreed or strongly agreed that access to financing was an issue, while 74.7 per cent said the cost of borrowing was an issue.
It also found that only less than a fifth used credit from financial institutions, while most Black women use personal financing, which Spencer said has challenges like paying higher interest rates that come with using a personal credit card.
Spencer said Black women say they don’t have the tools to sustain their business and have challenges accessing networks, which non-Black entrepreneurs have easier access to.
“I’m a black woman business owner myself. When I go into the bank, it’s a different experience from when someone else goes into the bank,” Spencer said.
“The biggest challenge that Black business owners have is that the owners are Black.”
She said it takes a lot of confidence for Black businesswomen to go to a bank and ask for a loan or talk about their business plan.
Despite evidence that Black women were often pushed to start their own businesses after experiences of workplace bias and racism, the report said many are drawn to address unmet needs in the market, celebrate their culture and give back to their communities.
The report shows that support for Black women entrepreneurs must increase as Canada moves to economic recovery, Spencer said.
“We need (to) tell the stories of success within the community of Black women entrepreneurs, so other entrepreneurs can see and learn and be inspired and motivated by this success and know that if we can see it, we can be it.”
The study was done through analysis of data from a questionnaire of 700 Black women who are entrepreneurs, the group said.