Small businesses benefit from targeted grant and loan programs, support their continued existence

Introduction

In two recent Supreme Court cases, justices ruled that the 14th amendment must be applied in a “colorblind” manner, overturning affirmative action programs at colleges and universities. Since those rulings, legal challenges against other types of programs and policies that are based on race and ethnicity have proliferated. This includes several cases that have directly impacted small businesses, such as the U.S. Small Business Administration’s (SBA) 8(a) Business Development program for disadvantaged small businesses and the Fearless Fund grant program that was targeted to Black women entrepreneurs. Many of these programs have either been forced to change their operations or shut down entirely, leaving small businesses with less access to the support they need to thrive.

As these programs have come under legal attack, it’s important to take the perspectives and experiences of America’s entrepreneurs into account. Small Business Majority’s new national opinion poll of small business owners reveals that a plurality has benefited from government, private, or nonprofit programs designed to support a specific demographic group. This includes government agencies and federally-backed programs such as SBA’s 8(a) program, Women’s Business Centers and the Restaurant Revitalization Fund as well as private grant and loan programs, consulting through chambers of commerce, and support provided through business incubators and accelerators. These programs have helped them with general business success and growth, access to capital and one-on-one mentoring and guidance. Additionally, entrepreneurs are supportive of government and private programs that help business owners of certain demographic groups. They disagree with recent court rulings that limit these programs from helping targeted groups.

Key findings

• Of the small business owners who qualify for government programs for specific demographic groups, such as the Minority Business Development Agency (MBDA) or Women’s Business Centers, 29% have accessed and benefited from one.
• Small businesses are strongly supportive of government programs that provide services to targeted demographic groups such as people of color and women: 79% believe these programs should continue.
• Of the small business owners who are eligible for private or nonprofit programs designed for a specific demographic group, 37% report they have benefited from accessing one.
• Nearly three-quarters (73%) of small businesses agree that there should continue to be private programs that help business owners of certain demographic groups.
• The sample was diverse: 60% of respondents were female, and 39% were male. Fifty-seven percent were white, 24% were Black, 17% were Hispanic, 5% were Asian, 5% were Native American and 1% were Native Hawaiian.