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Small Business Credit Survey 2021 Report on Firms Owned by People of Color

The COVID-19 pandemic has deeply impacted communities of color and small businesses of color, in many cases to a greater extent than their white counterparts. Prior to the pandemic, small businesses owned by people of color, in aggregate, faced greater challenges than white-owned firms. The 2020 Small Business Credit Survey (SBCS) provides evidence that the pandemic exacerbated those challenges, an important finding as those businesses continue to weather the impact of the COVID-19 pandemic.

The challenges that firms of color disproportionately face make it important to disaggregate small business outcomes by race and ethnicity of firm ownership. Understanding the differences between the experiences of Black-, Asian-, and Hispanic-owned firms can help policymakers better address the unique needs of small businesses of color and implement programs to support the survival of these small firms and their recovery from the effects of the pandemic.

Survey Findings

The SBCS provides data on small business performance, financing needs and decisions, and borrowing outcomes. The 2020 SBCS, which was fielded in September and October 2020, yielded 9,693 responses from small employer firms in all 50 states and the District of Columbia. This 2021 Small Business Credit Survey Report on Firms Owned by People of Color, therefore, offers unique insight into important segments of the small business population.

  • Key performance indicators declined substantially for the majority of employer firms between 2019 and 2020. However, firms owned by people of color reported more significant negative effects on business revenue, employment, and operations as a result of the COVID-19 pandemic.
  • Employer firms owned by people of color faced significant financial stress in 2020, more so than their white-owned counterparts.
  • The Paycheck Protection Program (PPP) was the most commonly sought form of emergency assistance funding among employer firms. Employer firms owned by people of color, and particularly Black-owned firms, were less likely to receive all of the PPP funding that they requested.
  • At the time of the survey, employer firms owned by people of color expected revenue, employment, and operational challenges to persist into 2021 or beyond.
  • Employer firms owned by people of color were less likely to have their financing needs met than white-owned firms.
  • Employer firms owned by people of color reported differences in their use of financial services and satisfaction with their providers.
  • Nonemployer firms of color experienced sharp sales declines and poor financial conditions. They also sought different forms of pandemic-related emergency assistance.


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