May 26, 2021
Black entrepreneurs say access to capital among challenges to success, survey finds
The Canadian Press,
We have a long road ahead in addressing racism in corporate Canada: Black Opportunity Fund co-founder
Jae Anthony has experienced first-hand how raising capital can be an inequitable process for Black Canadians.
When drumming up financial support for new Caribbean restaurant ventures, some potential investors lost interest because they didn't even know what that kind of cuisine entailed.
As a result, he had to rely on support from his family, which eventually allowed him to open multiple restaurants over eight years despite the hurdles, and to go on and make appearances on the Food Network TV channel. He currently owns Tropikal Restobar in Montreal.
Anthony said people involved in providing financing and support for businesses should be from all sorts of backgrounds, so they can support a diverse range of businesses.
“It shouldn't just be, 'no, you don't qualify because you only have a fair credit rating.”'
A survey recently commissioned by the African Canadian Senate Group and Sen. Colin Deacon now illuminates the experiences of Black Canadians like Anthony, and experts say the statistics are a first step in tackling inequality in entrepreneurship.
The survey of 342 Black entrepreneurs found three-quarters say their race makes it harder to succeed in business, with systemic racism, access to capital and the lack of a business network all cited as barriers to growth.
The survey found the top challenges are access to funding and financing, and only 19 per cent of those surveyed say they trust banks to do what is right for them and their community.
It also found that almost half of Black entrepreneurs are unable to pay themselves from their business.
Tiffany Callender, CEO of the Federation of African Canadian Economics, said part of the reason why Black entrepreneurs face difficulties around funding is because institutions that finance businesses often don't understand Black communities, or the products and services that cater to them.
“Because there is such a gap in understanding the way in which Black people live, or what would be an interest for them in the market, the entrepreneurs then become misunderstood by financial institutions,” said Callender.
She said Black-owned business also experience barriers when trying to expand out of their original market, as financial institutions will sometimes see them as being out of their depth.
Frances DelSol, executive director of the Black Business and Professional Association, which was involved in the survey, said none of the findings in the report are surprising to her, but the data will help drive change.
“It gives us a sense of belonging, and says this is true, this is real this is happening,” said DelSol.
“This is going to legitimize the concerns we've had for years.”
The report found that networks and support are critical to empowering Black entrepreneurs and yet a majority say they do not know how to access supports or advice when challenges arise in their business.
That's why the BBPA has introduced programs that help link new entrepreneurs with Black mentors who can help them navigate financial institutions and marketing firms to access the kind of support that others are more easily able to attain.
The federal government has started initiatives to help support Black entrepreneurs, with Prime Minister Justin Trudeau announcing $221 million in funding from the government and financial institutions to support and finance Black businesses last year.