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The State of Black Business: New Survey Finds Progress, Challenges

  • Groupon and National Black Chamber of Commerce survey for National Black Business Month found nearly 80% of Black business owners say their businesses are better off than last year
  • Nearly three of four Black business owners say investment in Black-owned businesses still trails white-owned businesses
  • Groupon is helping consumers discover and patronize local, Black-owned businesses

CHICAGO–(BUSINESS WIRE)–Groupon, the go-to destination for local experiences, and the National Black Chamber of Commerce released their second annual survey of Black small business owners in recognition of August’s National Black Business Month. Groupon and the chamber spoke with 500 Black-owned small businesses and 1,500 consumers to gain a better understanding of how consumers’ shopping habits have forever changed since the racial reawakening that began in the United States last summer. According to the results, consumers are largely keeping their promises to spend a greater share of their wallet at Black-owned businesses, but challenges remain.

NBBM infographic (3)
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Nearly 80% of Black business owners said their businesses were better off than they were last year at this time and nearly 60% said their business is as good or better than it was prior to the pandemic. Seven out of 10 consumers said that they actively sought out opportunities to shop at Black-owned businesses and an equal number plan to continue to do so long term. Nearly 70% of consumers also said they find it helpful when a business identifies as Black-owned and approximately 60% said they would be willing to pay more if they knew a small business was Black-owned.

More than half of all Black business owners said that while there’s more attention on the concerns and needs of businesses owned by people of color, the overall environment is still quite challenging. Roughly three out of four Black business owners said capital investment still lags in comparison to their white counterparts. In fact, gaining access to capital investment was the number one concern among the businesses surveyed. Their ability to tap into government resources, recover from the pandemic, build a support network and hire enough staff, were the other top concerns cited. Ultimately, black business owners indicated that the system that sets them up for success or failure still has a long way to go and more than 75% of those surveyed feel as though they’re held to a different standard, which makes launching and growing a business as an entrepreneur even harder.

“Groupon recognizes the importance of being a brand that lives by its values, taking a stand for what’s right and leveraging our influence to drive positive change within our communities,” said Aaron Cooper, Interim CEO, Groupon. “Every merchant has worked hard to build a business that they can be proud of, and it’s important for us to understand the systemic barriers and biases that exist for marginalized communities. As a company, we’re committed to highlighting and championing Black-owned businesses and connecting them to our diverse customer base. While we’re making progress, we recognize that we have more work to do.”

Groupon is taking action in August and throughout the year to translate its support for Black-owned businesses into meaningful action:

  • The company has curated a collection of hundreds of Black-owned businesses across the United States and will be featuring these merchants across Groupon’s mobile, online and social channels throughout the month of August. In 2020, Groupon saw searches for “Black-owned” increase nearly 400% for the full-year vs. 2019. During Groupon’s 2020 Black Business Month campaign, units sold for businesses that identified as Black-owned and participated in the month-long event increased 44% compared to the previous month. To find Black-owned businesses that you can support in your community, please visit gr.pn/celebrate.
  • In addition, the company has partnered with Kiva.org––a renowned crowdfunding platform––to raise funds from consumers to support a Black-owned business fund that will help create opportunity and unlock investment capital for Black merchants across the U.S.
  • Groupon is also working with the National Black Chamber of Commerce to offer an online marketing and technology education session at the Illinois Chamber’s annual convention in September. The Groupon and chamber survey of Black-owned businesses identified social media, lack of a digital/online presence, consumer awareness, upfront costs and foot traffic as their biggest marketing challenges. Experts from Groupon will consult with business owners who are attending the convention.
  • On Aug. 22, Groupon is partnering with The Black Women’s Expo – BWE Next to feature 10 Groupon merchants as exhibitors. Each Black-owned business will have their own booth in the expo’s marketplace and Groupon will help promote and advertise their presence. Groupon will also have its own booth at the expo to help the company recruit diverse applicants from the estimated 30,000 attendees.
  • Finally, to help bring more attention to the disparities Black entrepreneurs face and resources available to help their businesses succeed, Groupon is joining forces with the Illinois Department of Commerce and Economic Opportunity (DCEO) to host a virtual panel discussion: Building Back Better: Charting Economic Recovery for the Black Business Community & Crafting the Roadmap for Access to Capital for Black Entrepreneurs. The discussion will take place on Aug. 25, 2021 at 10:00 a.m. CDT and will bring together a national audience of business, government and community leaders. For more information about the Groupon and Illinois Department of Commerce and Economic Opportunity virtual panels, please visit gr.pn/webinar.

“Over the past year we’ve made progress drawing attention to the needs and concerns of Black-owned businesses, but we know that we must do even better,” said Larry Ivory, chairman of the National Black Chamber of Commerce and president and CEO of the Illinois State Black Chamber of Commerce. “We’re grateful to companies like Groupon that are willing to listen to the concerns of our community and heed their responsibility to do more. By working together, we can help level the playing field for small Black-owned businesses, and we’re excited for Groupon to provide actionable and useful insights to our members.”

About the National Black Chamber of Commerce

The National Black Chamber of Commerce® was incorporated in Washington, DC in March 1993. The NBCC is a nonprofit, nonpartisan, nonsectarian organization dedicated to the economic empowerment of African American communities. In essence, the NBCC is on the leading edge of educating and training Black communities on the need to participate vigorously in this great capitalistic society known as America. The NBCC reaches 100,000 Black owned businesses. There are 2.6 million Black-owned businesses in the United States. Black businesses account for over $138 billion in revenue each year according to the US Bureau of Census. The National Black Chamber of Commerce® is dedicated to economically empowering and sustaining African American communities through entrepreneurship and capitalistic activity within the United States.

About Groupon

Groupon (NASDAQ: GRPN) is an experiences marketplace where consumers discover fun things to do and local businesses thrive. For our customers, this means giving them an amazing selection of experiences at great values. For our merchants, this means making it easy for them to partner with Groupon and reach millions of consumers around the world.

Contacts

Groupon

Nick Halliwell

nhalliwell@groupon.com

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New Goldman Sachs and Bipartisan Policy Center Report Shows Action Needed to Increase Small Businesses’ Access to Capital

As Paycheck Protection Program funds end, small businesses need more capital; Black-owned small businesses face larger hurdles than their white peers in accessing capital

NEW YORK–(BUSINESS WIRE)–A new report released today by Goldman Sachs 10,000 Small Businesses Voices in conjunction with the Bipartisan Policy Center shows the strain small business owners across the country are feeling as federal Paycheck Protection Program (PPP) funding is depleted. The report offers urgently needed policy solutions to put main street businesses back on the road to recovery.

In June, 82% of small business owners in a Goldman Sachs 10,000 Small Businesses Voices survey said their PPP funds would run out by the end of July. Yet just 24% said they were confident they could maintain payroll after depletion of PPP funds. Many small businesses say they are in a precarious position: emergency assistance is dwindling, and debt needs to be repaid—yet revenues have not fully recovered. For those seeking new sources of credit, pandemic disruptions are hindering their ability to secure financing.

The report also highlights a troubling fact: Black-owned businesses have significantly more difficulty accessing capital than their white peers. While PPP was broadly effective in sustaining employment at small businesses, its design reflected underlying disparities in access to finance. Challenges faced by Black small business owners include:

  • Black-owned businesses that are low credit risks are half as likely as white-owned firms to receive all the financing they seek, found a 2021 Federal Reserve Banks Small Business Credit Survey.
  • And white-owned businesses are twice as likely to receive all financing sought even when they are medium/high credit risk.
  • Research also finds racial differences in the decision to apply. Black small business owners with high credit scores are more than twice as likely to report a fear of denial than white founders with below median credit.

“As July comes to a close, small businesses across America face a grim reality: their Paycheck Protection Program funding is running dry, but our economy hasn’t fully recovered, the cost of doing business is increasing and their debts are coming due,” said Joe Wall, national director of the Goldman Sachs 10,000 Small Business Voices program. “Together with the Bipartisan Policy Center, our policy recommendations will help ensure a main street recovery continues.”

Policy actions recommended in the report include:

  • Create a long-term, low-interest loan guarantee program to provide flexible, patient credit to allow small businesses to rebuild balance sheets as they restore revenues.
  • Direct the Small Business Administration (SBA) to re-evaluate policies regarding financial performance in previous years to account for the impact of 2020 on small business balance sheets.
  • Make SBA subordination agreements as easy as possible regarding Economic Injury Disaster Loans (EIDL).
  • Consider actions that will expand the lender base in government guarantee programs.
  • Strengthen the capacity of CDFIs to distribute more small business credit in their target communities.
  • Prioritize small business financing as federal, state, and local governments distribute American Rescue Plan relief funds.

“Many American small businesses are still struggling to recover from the pandemic. Federal relief programs were crucial in helping them stay afloat,” said Dane Stangler, Director of Strategic Initiatives at the Bipartisan Policy Center. “Now, new actions are needed to help expand access to the credit they will need to invest and create jobs for their communities.”

The full report with detailed policy recommendations for increasing small business access to capital can be found here.

ABOUT 10,000 SMALL BUSINESSES VOICES

Goldman Sachs 10,000 Small Businesses Voices is an initiative for program participants to organize and advocate for policies that matter to them. It builds on Goldman Sachs 10,000 Small Businesses, which over the past decade has provided access to education, capital, and support services to more than 10,000 small business owners across all 50 states, Puerto Rico, and Washington D.C.

Contacts

Abbey Collins, Goldman Sachs, 212-902-5400