Jason Barnett and Derek Edwards from our small business team discuss the challenges that Black small business owners face, especially here in Detroit as we continue to focus and expand investment across the city and its neighborhoods.
Small businesses are essential to the economic success of a city. It’s been reported that Detroit could have as many as 60,000 small businesses operating across the city, which means a significant number of job opportunities for residents. These businesses are also vital to our communities and often serve as anchors and gathering spaces for residents while creating catalytic growth for neighborhoods by attracting more businesses to the area. And often times small business owners are more than just business operators, they are business leaders, commercial corridor drivers, relationship builders, and economic engine partners.
Small businesses in Detroit face challenges that many small businesses in other communities do not—namely access to customers. The city of Detroit is recovering from decades of disinvestment and a decreased population from 1.8 million at its peak in the 1950s to a current 700,000 with average household median income levels of less than $30,000. This has created neighborhoods that have drastically changed overtime and have suffered from a lack of density, blight, and a decrease in walkability. This means that many small businesses in these neighborhoods struggle to keep their doors open.
And in Detroit the share of businesses owned by residents of color is eight times higher than the national average, bringing another kind of challenge to our city’s business owners as many are trying to overcome challenges linked to systemic racism. Many Black business owners struggle to gain access to the capital they need to get started and sustain themselves. And in addition to the challenge of density population, there is also the misconception by residents of the surrounding suburbs that Detroit is unsafe and lacking in small business options.
Invest Detroit has been part of a growing network of private, public, and philanthropic partners who are working together to help turn this around. This investment of capital and resources has greatly helped move the city forward, and we believe it is essential that equitable opportunity be at the forefront of successful small business investment for all businesses owned and operated by people of color.
We at Invest Detroit are committed to being a part of the solution in helping to overcome some of the systemic barriers and financial challenges that underrepresented business owners experience. In fact, since we started our small business lending program, we have awarded over two-thirds of our loans to people of color, women, and/or Detroit residents. In addition to ensuring equitable access to capital, we are working to not only grow our small business lending program but expanding our technical assistance support so that business owners have the tools, partnerships, and support they need to be successful for the long-term.
With many businesses struggling to survive the impact of COVID-19, we are confident that efforts like Detroit Means Business, an online resource put together by a coalition of private, public, and philanthropic partners, will be support our small business community as we continue to tackle this current challenge. But we also have our eye on going beyond surviving to using this time to reflect on what our community needs to grow. We are looking for ways to go beyond returning to normal and continue our growth trajectory toward a vision that includes diverse, better supported neighborhood businesses that reflect their community and offer residents jobs, resources, and a better quality of life.
We want our Detroit small business owners to know that we, our partners, and this city are excited to have your business here and we want to do what we can to support you.