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San Antonio Small Businesses Face $8.3 Billion Capital Gap, With Less Capital Going To Black- and Hispanic-Owned Businesses

Published on Friday, April 2, 2021

San Antonio Small Businesses Face $8.3 Billion Capital Gap, With Less Capital Going To Black- and Hispanic-Owned Businesses

Black-and Hispanic-Owned Businesses Also Heavily Represented in Industries Most Impacted By COVID-19

CONTACT: Caitlin Cowart
Caitlin.cowart@sanantonio.gov

 

SAN ANTONIO (April 2, 2021) - As San Antonio continues to navigate the COVID-19 pandemic, a new report finds that there has been a historic, unmet annual demand of approximately $8.3 billion in capital for small businesses in Bexar County and that, while individual economic development organizations are providing strong business support services, the San Antonio small business support system as a whole lacks adequate resources and coordination among service providers. The report will be presented at the San Antonio City Council Economic and Workforce Development Committee meeting on April 6, 2021 from 2 p.m.- 4 p.m. The meeting will be available to the public at AT&T channel 99, Grande channel 20, Spectrum Channel 21, digital antenna 16, and www.sanantonio.gov/TVSA or by calling (210) 207-5555 (English and Spanish available). To submit public comment or sign up to speak, please go to www.sanantonio.gov/agenda.

“The City of San Antonio continues its commitment to convene key stakeholders in government, philanthropy, and the private sector to create equitable and innovative solutions to support business owners who have faced systemic barriers to growth and are being disproportionately impacted during the COVID-19 pandemic.” said Alex Lopez, Assistant City Manager. “Thank you to JPMorgan Chase for funding this report which will help inform solutions to support small businesses in our community, especially those owned by people of color.”

The research, funded by JPMorgan Chase and conducted by Next Street and Common Future, examined the current state of Bexar County’s small business communities and business support systems, with a specific lens on local businesses owned by people of color and COVID-19 response and recovery.

San Antonio and Bexar County are home to approximately 34,000 small businesses and approximately 145,000 sole proprietorships. These small businesses and sole proprietors account for 34% of the local workforce. However, while Hispanic and Black residents make up 60% and 9% of the Bexar County population, they only own 24% and 2% of all businesses, respectively. Business ownership disparities are paired with revenue and employment imbalances, with Hispanic- and Black-owned businesses historically earning less revenue and hiring fewer employees than their White-owned counterparts.

The COVID-19 pandemic has only magnified these disparities. Since the start of the pandemic, total small business revenue and the number of small businesses open in San Antonio decreased by 45% and 35%, respectively. During this crisis, Black-owned businesses in San Antonio were overrepresented in deeply impacted, neighborhood-based industries such as food services, laundry services, and retail. Hispanic-owned businesses were also significantly impacted, heavily represented in industries that have struggled due to lower consumer and nonessential business spending, including construction, merchant wholesale, and truck transportation.

“Ensuring that our BIPOC small businesses and microentrepreneurs reach their full potential could unleash billions of dollars in benefits to San Antonio's economy,” said Leilah Powell, Executive Director of San Antonio LISC. “Public and private sector partners can harness the opportunity for a more equitable economic recovery and expansion by making smart investments in this ecosystem.”
 
National consultants Next Street and Common Future partnered with the City of San Antonio, LISC San Antonio, and over forty local stakeholders in San Antonio and Bexar County to conduct the research.
 
"The COVID-19 pandemic has only shed a powerful light on what many of have known for years: small business of color need more resources and capital to fully participate in our economy,” said Charisse Conanan Johnson, Managing Partner at Next Street. “We will not recover from the pandemic unless financial institutions, corporations, philanthropy, small businesses, nonprofits, and government work together to implement innovative solutions that help people generate wealth through small business ownership. Together, we can truly create a small business economy that works for everyone – regardless of your race, ethnicity or gender.”
 
“COVID-19 has unveiled for more people what we knew all along, and what data in our new report on San Antonio small businesses shows: Black-and Hispanic-owned businesses are systematically deprived of and excluded from investment and resources, despite being heavily relied upon in communities across the nation. They urgently need more support from capital and resource providers, which will benefit all of us,” said Rodney Foxworth, CEO of Common Future.
 
“It is important for JPMorgan Chase to fund this work to help inform the discussion and uncover what the San Antonio small business support system needs to better support entrepreneurs of color,” said Charlie Corrigan, Executive Director for Philanthropy at JPMorgan Chase. “This work elevates community voices and highlights what the nonprofit and funder communities can do to serve our local Black-and Hispanic-owned businesses during these unprecedented times.”
 
The San Antonio City Council Economic and Workforce Development Committee meeting on April 6, 2021 from 2 p.m.- 4 p.m. will be available to the public at AT&T channel 99, Grande channel 20, Spectrum Channel 21, digital antenna 16, and www.sanantonio.gov/TVSA or by calling (210) 207-5555 (English and Spanish available). To submit public comment or sign up to speak, please go to www.sanantonio.gov/agenda.
 
Potential solutions identified to fill gaps in the local small business support ecosystem include:

  • Ecosystem coordination: Forming coalitions that bring together small businesses, capital and service providers, funders, and other stakeholders to coordinate and advocate for ecosystem priorities. Ecosystem coordination efforts should build off emerging momentum created by existing collaboratives and convening bodies and integrate with the region’s existing network of local chambers of commerce and economic development agencies.
  • Access to flexible capital. Enhancing the availability and access of flexible debt and equity capital to strengthen businesses, community financial institutions, and responsible investors. In San Antonio and Bexar County, this work should integrate within the region’s network of community financial institutions with longstanding history in the market, including capital access programs and emergency relief funds administered before and during the COVID-19 pandemic.
  • Sustainability and resiliency. Forming and sustaining collaboratives of capital and service providers to build more resilient businesses and communities of color. Continued COVID-19 recovery efforts should draw from emergency efforts created in the immediate response to the pandemic, including the grant and loans programs offered by the City and County governments. Efforts to support business owners of color to prevent commercial displacement and financial instability should integrate with existing initiatives led by local capital and service providers with deep histories in the neighborhoods they serve.
  • Access and Networks. Expanding access to resources by creating networks of business owners of color and developing corridor-level business services. Initiatives to bolster access and quality of these networks should integrate and refine existing initiatives and corresponding entrepreneurial networks.
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