Covid-19 has destroyed 41% of Black small businesses

The global coronavirus pandemic has upended business for companies across the US, but it has dealt Black small businesses an especially hard blow, according to a paper published by the National Bureau of Economic Research (NBER).

The number of African-American business owners fell from 1.1 million in February to 640,000 in April, a 41% decline. By comparison, the overall number of small business owners dropped by 35%.

Black companies are more likely to be in sectors vulnerable to Covid-19-related disruptions—including leisure, hospitality, and retail—and less likely in categories deemed “essential,” such as grocery stores. Prior to the pandemic, black business owners relied on these hard-hit sectors for about 40% of their revenue, compared with 25% for overall firms, according to a report from consulting firm McKinsey & Company.

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