According to the U.S. Small Business Administration, there are 795,624 small businesses in Virginia. Over 25% of these businesses are owned by people of color, including over 100,000 Black-owned operations.
Every one of these businesses has faced challenges in recent years brought on by the pandemic and inflation, but the twin threats have been especially tough on Black and brown business owners. More than 40% of Black business owners, for example, reported they were no longer working in the early months of the pandemic, compared to 17% of their white peers.
Even starting a business is a challenge for Black entrepreneurs. Studies show Black Americans have significantly less startup capital and are less likely to have wealth to tap due to generations of systemic racism and discrimination. One report from Goldman Sachs found that 85% of Black small business owners and 81% of Hispanic small business owners worried about their ability to access loans.
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Mieko Timmons
As vice president of the Intergenerational Independent Women of Color (IOWOC), a group united with a common goal to harness the power of African American women and use it to generate change — these trends not only trouble me but drive my work. The intersectional disparities that continue to harm women of color certainly extend to the small business sector, where troubling racial and gender gaps exist in terms of small business ownership. African American women account for 7% of the total population in our country, but own less than 1% of the businesses.
This dynamic needs to change. We need policies in Washington, D.C., that empower African American women and enable them to contribute all they have to offer through entrepreneurship. Unfortunately, a concerning new proposal from the Federal Reserve would do the opposite by worsening existing barriers that small business owners of color already face.
The proposal in question would raise capital requirements on the largest banks by as much as 20%. Requiring the biggest banks to hold more capital in reserve will limit the capital these banks can make available to borrowers. For some small business owners, the proposal will mean higher borrowing costs. For many Black and brown small business owners, it may put credit out of reach altogether.
The proposal comes at a particularly troubling time. Recent changes in the economy, like inflation and interest rate hikes, have already made accessing capital more difficult. Loans have become more expensive and harder to get. According to the Federal Reserve’s Survey of Loan Officer Opinion, 50% of banks have tightened their credit standards for small businesses since 2005.
The Federal Reserve’s proposal will make this worse.
Thankfully, outside the Federal Reserve some in Washington do understand the challenges facing women and small business owners of color. The Biden-Harris administration has issued a series of executive orders to remove some of the barriers faced by minority entrepreneurs. Regrettably, the proposal from the Federal Reserve would undermine these orders and other policies.
My hope is that the agency takes the time to understand how detrimental these new proposals can be for small businesses. As important as it is to strengthen the financial system, it is critical that we do not reinforce the systemic inequalities of the past. Women and other minority small business owners in Virginia still face too many challenges that our counterparts do not. The Federal Reserve should be working to close these inequalities, not making them grow wider.
From the archives: In 1960, The Richmond 34 were arrested during a sit-in at the Thalhimers lunch counter
Demonstrators are arrested and charged with trespassing at Thalhimers department store on Feb. 22, 1960. Those arrested would not leave after being refused service at a tearoom and a lunch counter.
Crowd inside Thalhimers department store the day of demonstration and arrests. Photo was not published. Photo taken Feb. 22, 1960. Was received by Times-Dispatch library on February 23, 1960
The Rev. Frank Pinkston, a 23-year-old Baptist ministerial student from Silver Springs, Fla., is arrested and charged with trespassing at Thalhimers department store on Feb. 22, 1960. Those arrested would not leave after being refused service at a tearoom and a lunch counter.
Crowd at city lock-up after 34 demonstrators were arrested and charged with trespassing at Thalhimers department store. Those arrested would not leave after being refused service at a tearoom and a lunch counter.
Front page of the Richmond Times-Dispatch from Feb. 23, 1960. An article about arrests at the Thalhimers sit-in is in the bottom right corner.
The story that ran on the Feb. 23, 1960 front page of the Richmond Times-Dispatch.
Page 4 of the Richmond Times-Dispatch from Tuesday, February 23, 1960.
Photo from page 4 of the Richmond Times-Dispatch from Feb. 23, 1960.
Published caption: “Mounted and K-9 Squad Policemen Break Up Crowd at Lock-Up After Arrests”
Thalhimers picket and protest
Thalhimers picket and protest.
Thalhimers picket and protest
LeRoy Bray arrested at Thalhimers department store as students from Virginia Union University attempt to get service in whites-only dining areas.
Frank Pinkston, lower right, at Thalhimers department store, outside the Richmond Room, Feb. 22, 1960, in an attempt to be seated in segregated dining areas.
Protest at Thalhimers department store in downtown Richmond as Virginia Union University students attempted to get served in whites-only dining areas. Dr. Marshall Banks is at left, against the wall. Cornell Moore is behind him.
Pickets outside Thalhimers department store in downtown Richmond as Virginia Union University students attempted to get served in whites-only dining areas.
Pickets outside Thalhimers department store in downtown Richmond as Virginia Union University students attempted to get served in whites-only dining areas.
Frank Pinkston, lower right, at Thalhimers department store, outside the Richmond Room, Feb. 22, 1960, in an attempt to be seated in segregated dining areas.
Protest at Thalhimers department store in downtown Richmond as Virginia Union University students attempted to get served in whites-only dining areas.
Protest at Thalhimers department store in downtown Richmond as Virginia Union University students attempted to get served in whites-only dining areas.
Thalhimers picket and protest.
Elizabeth Johnson Rice was the speaker of the “Civil Rights Day of Remembrance” at the former Thalhimers Department Store on Broad Street on Sunday, February 22, 2004. Rice returned to Richmond to commemorate the 44th anniversary of their protest over lunch counter segregation.
Viewers stand under umbrellas on Feb. 22, 2010 during the unveiling of a marker commemorating the Thalhimers sit-in and the Richmond 34.
Elizabeth Thalhimer-Smartt (left) and Elizabeth Johnson-Rice pull back the cover over a marker commemorating the Thalhimers sit-in and the Richmond 34 on Feb. 22, 2010.
Rev. Leroy M. Bray, Jr. photographed Wed. Feb. 10, 2010 in Richmond. Mr. Bray was one of 34 VUU students arrested for defying segregation and will be speaking at 50th anniversary events.
Elizabeth Johnson Rice, one of the 34 VUU students arrested in 1960 lunch-counter sit-in at Thalhimers.
Elizabeth Johnson Rice in her VUU yearbook photo
Del. Mamye E. BaCote, D-Newport News, center, received a standing ovation during the floor session of the House of Delegates in Richmond on Monday, Feb. 22, 2010. BaCote had just revealed that she was one of the “Richmond 34” who staged a sit-in at the all-white Thalhimers lunch room when she was a student at Virginia Union University.
Ford T. Johnson of Maryland unveils the historical marker commemorating the “Richmond 34,” a group of mostly 34 Virginia Union University students arrested during a sit-in at the Thalhimers department store. Johnson, who is one of the 34, was accompanied by three others who took part in the sit-in: (from left): Johnson’s sister, Elizabeth Johnson Rice; Raymond B. Randolph Jr. of Farmington Hills, Michigan (third from left); and Wendell Foster of Richmond (fourth from left). The unveiling took place along Broad Street, between 6th and 7th streets on June 28, 2016.
Elizabeth Johnson Rice speaks during the unveiling of an historical marker commemorating the 1960 “Richmond Sit-In” of 34 Virginia Union University students at the Thalhimers department store lunchroom. Rice is one of the 34 students who took part in the sit-in. The ceremony took place on Broad Street between 6th and 7th Streets. June 28, 2016.
Virginia Governor Ralph Northam, right, welcomed the Rev. Leroy M. Bray, Jr., left, and his wife, Cynthia, center to the Executive Mansion in Richmond on Friday, Feb. 22, 2019. They were part of a group of black leaders, some of whom were members of the Richmond 34, who stages a sit-in at Thalhimers lunch counter in 1960.
Virginia Governor Ralph Northam, right, talks with Rev. Dr. Claude Perkins, left, and his wife Cheryl, center, inside the Executive Mansion in Richmond, on Friday, Feb. 22, 2019. They were part of a group of black leaders, some of whom were members of the Richmond 34, who staged a sit-in at Thalhimers lunch counter in 1960.
Virginia Governor Ralph Northam, left,, welcomed Dr. Roland Moore, right, and his wife, Blanche, center, to the Executive Mansion in Richmond, VA Friday, Feb. 22, 2019. They were part of a group of black leaders, some of whom were members of the Richmond 34, who staged a sit-in at Thalhimers lunch counter in 1960.
Virginia Governor Ralph Northam, left, welcomed, from left, retired judge Birdie Hairston Jamison, Dr. Anderson J. Franklin and Elizabeth Rice to the Executive Mansion in Richmond on Friday, Feb. 22, 2019. They were part of a group of black leaders, some of whom were members of the Richmond 34, who staged a sit-in at Thalhimers lunch counter in 1960. Franklin and Rice were two of the original 34.
Virginia Governor Ralph Northam, center, welcomed black leaders and some members of the Richmond 34 to the Executive Mansion in Richmond on Friday, Feb. 22, 2019. They were part of a group of black leaders, some of whom were members of the Richmond 34, who staged a sit-in at Thalhimer’s lunch counter in 1960.
Virginia First Lady Pam Northam, left, watches as her husband, Governor Ralph Northam, right, talks with Rev. Dr. Claude Perkins, center left, and his wife Cheryl, center right, inside the Executive Mansion in Richmond on Friday, Feb. 22, 2019. The Perkins were part of a group of black leaders, visiting the Mansion, some of whom were members of the Richmond 34, who staged a sit-in at Thalhimers lunch counter in 1960.
Rev. Dr. Claude Perkins, left, and his wife Cheryl, second from left, talk with Virginia Governor Ralph Northam and First Lady Pam Northam inside the Executive Mansion in Richmond on Friday, Feb. 22, 2019. The Perkins were part of a group of black leaders, visiting the Mansion, some of whom were members of the Richmond 34, who staged a sit-in at Thalhimers lunch counter in 1960.
Elizabeth Johnson Rice, center, surrounded by lawmakers and several other original members of the Richmond 34, were honored by the House of Delegates inside the State Capitol in Richmond on Friday, Feb. 22, 2019. The Richmond 34 staged a sit-in at Thalhimers lunch room in 1960.
Virginia Governor Ralph Northam, center, welcomed black leaders and some members of the Richmond 34 to the Executive Mansion in Richmond on Friday, Feb. 22, 2019. They were part of a group of black leaders, some of whom were members of the Richmond 34, who staged a sit-in at Thalhimers lunch counter in 1960.
Del. Delores McQuinn, D-Richmond, left, stands with Elizabeth Johnson Rice, center, surrounded by several other original members of the Richmond 34, from left, Dr. Anderson J. Franklin, Rev. Leroy M. Bray, Jr. and Wendell Foster, pose after they were honored by the House of Delegates inside the State Capitol in Richmond on Friday, Feb. 22, 2019. The Richmond 34 staged a sit-in at Thalhimers lunch room in 1960.
Mieko Timmons is vice president of IIWOC Intergenerational Independent Women of Color. Contact her at miekotimmons@iiwoc.org.