• In 2021, racial inequities in firm ownership were far more severe among firms with paid employees than among nonemployer firms.
• Among firms with paid employees in 2022, the rate of business ownership for white and Asian American workers was significantly higher compared with Black and Latinx workers. 
• Among nonemployer firms, the number of Black-owned firms grew the most from 2019-2021.
• Among firms with paid employees overall, and for white, Black, Latinx and Native American-owned firms, firm growth was strongest in the utilities industry from 2017-2022. For Asian-owned firms, growth was strongest in the transportation and warehousing industry. 
• Among firms with paid employees, the number of women-owned firms and men-owned firms per 100 workers increased slightly from 2007 to 2022, but there are still about four firms owned by a man for every two firms owned by a woman.
   

People of color are less likely than white people to have access to capital and contracts to start and grow a business, due in part to historical policies such as redlining that denied home loans and wealth-building opportunities to people of color. Today, business loan denial rates for firms owned by people of color are more than twice as high compared to white-owned businesses Business owners of color also pay higher interest rates and receive lower loan and equity investments. During the shelter-in-place phase of the Covid-19 pandemic, racial discrimination among lenders prevented many entrepreneurs of color from accessing paycheck protection program loans. Underrepresented groups also often face barriers to accessing important networks and training programs for maintaining a successful business.

• Increase access to resources to help underrepresented entrepreneurs build and repair credit and attract investment and loan capital to start and grow their businesses.
• Increase resources for Minority Business Development Agency (MBDA) Business Centers, which help entrepreneurs of color gain access to capital, contracts, and markets.
• Connect aspiring entrepreneurs to business mentoring programs through government agencies and organizations such as the Network for Teaching Entrepreneurship.
• Include entrepreneurship as a part of career and technical education and include age-appropriate entrepreneurial skill-building in K–12 education.
• Ensure access to affordable banking products, particularly those that can build credit history and credit scores.
• At the federal level, reform the Community Reinvestment Act to expand access to fair financial products and services for entrepreneurs of color, protect and expand the power of the Consumer Financial Protection Bureau to enforce fair lending laws and investigate complaints, and set aside a share of public contracts for businesses owned by people of color to mirror area demographics.
• Ensure that Covid-19 pandemic recovery efforts center racial equity as a core concern in supporting local economic growth.

• Reports: The Future of Banking: Overcoming Barriers to Financial Inclusion for Communities of Color; The Color of Entrepreneurship; Getting Entrepreneurs of Color Access to the Tools of Success

• Data: Prosperity Now Scorecard; Federal Financial Institutions Examination Council: Census & Demographic Data