Businesses owned by people of color faced more financial and operational challenges than their white-owned counterparts and often were less successful at obtaining the funding needed to weather the effects of the pandemic.
Revenue and employment improved for small businesses since 2020, but performance largely lags prepandemic levels. Financing approval rates continued to trend lower than in years prior to the pandemic.
Businesses with no employees other than the owner often turned to personal funds in response to financial challenges during the pandemic. These nonemployers were less likely than employer firms to seek pandemic-related emergency funding and less likely to be approved.
Firms of color were more likely to experience financial and operational challenges stemming from the pandemic. These challenges are particularly salient given the important role business ownership plays in wealth building and employment in communities of color
Older entrepreneurs are the majority of small business owners, yet they faced outsized challenges this year, including business closures, depletion of personal assets, and weakened revenue streams. These impacts were even more pronounced for older entrepreneurs of color.
Small businesses continue to face significant challenges amid the COVID-19 pandemic, including weak demand, heightened expenses, and limited credit availability. Nearly one-third of firms say they’re unlikely to survive without additional government aid until sales recover.