Research by American Express revealed Black women are starting businesses at the fastest clip of any racial group in America, CNBC reported.
The number of firms owned by women has grown by 164% since 2007 as U.S. entrepreneurship overall is declining.
Even with this progress, access to capital is an ongoing challenge for black women. Gail Warrior, who is the chief executive of Warrior Group in Dallas, shares in that experience.
Warrior Group is one of the largest woman- and minority-owned construction companies in the U.S. Before her company was securing big deals like a government contract, she needed some capital to get her business started.
In 2000, Warrior applied for capital at a bank she has multiple accounts with, including a joint-account with her husband and a business account. The bank denied her.
“They said they would do it under review if I would consider taking out a loan with my husband a co-signer,” she recalled. She added that she was turned down by a few other banks before secured $4 million from Texas Women's Venture Fund.
According to the Federal Reserve System’s 2016 Small Business Credit Survey, Black women are less likely to receive some or all of the financing they requested.
"The Small Business Administration Office of Advocacy has found that women and minority business owners were denied loans and pay higher interest rates than white counterparts, even after controlling for factors such as credit score," CNBC reported.
Shelly Bell, founder of Black Girl Ventures, said the key to securing capital is networking. BGV is "an organization that provides education and advisory services that outline a road map for the growth and success of minority and/or veteran women entrepreneurs," according to CNBC.
"Most cities have some co-working space but don’t have a low-barrier way to access capital. They may not have black and brown leaders working locally to move the needle on things. So showing up and being in the room is a huge part of the work,” she said.
The banking world is predominantly white and male, meaning that women and minorities may have less of a shot. CNBC reports that investors don't really see market demand or gaps the way some minority women do with their businesses.
“There are banks that are discriminatory... Where do you find those connections? One of the things we hope to do is bring those people into one space,” she said.
Bell said some investors say they can't find minority business owners, which is where BGV comes in.
Organizations like BGV help bring investors and minority female entrepreneurs together in order to close those gaps.
“Investors sometimes say they can’t find a black or brown business owner or black or brown women. I want to raise my hand to say I am here to facilitate conversation. I have an entire pool of women-owned businesses. I would like for the day of ‘I couldn’t find anyone’ to go away,” she said.
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