Black History Month helped to shine a spotlight on some of the amazing black-owned businesses in the South West, and it’s been great to see BusinessLive continuing to celebrate these fantastic companies and entrepreneurs throughout the year.
Companies run by entrepreneurs of African and Caribbean origin contribute £25b to the UK economy every year, but we also know many are still operating with severe limitations. Lloyds Bank’s 'Black. British. In Business and Proud' report, delivered in collaboration with the Black Business Network, indicated a reluctance among black business owners to access finance to support their growth, with concerns around taking on debt and not knowing which funding to choose the key reasons.
With so much uncertainty at the moment, having access to the right support is key. The report revealed that just 12% of black entrepreneurs turn to banks when seeking advice and support, something the financial service industry must urgently address. We’ve got to do more to create an ecosystem of support that drives economic growth. To achieve this, the banking sector needs to work with the black business community and government to break down barriers and enable access to support and advice.
We’ve been listening to black entrepreneurs to understand the challenges they face so that we can take the right action in future. Importantly, we know many concerns are specific to black business owners, which is why it’s important to move away from catch-all terms like ‘BAME’ or ‘ethnic minorities’ so that we can tackle the unique challenges that black communities face.
It is clear there is much work yet to be done across the banking industry. We found that only 40% of black business owners trust banks. Many Black business owners rely on small, personal loans from family or self-finance their businesses instead of turning to banks and other financial institutions. This limits the amount of funding many are able to access, which risks slowing growth and productivity.
The report also found that, after friends and families, community groups are the second most popular source of support for black entrepreneurs. There are some great examples of community groups across Bristol, and banks need to look at how we can work with them to expand the support available to local businesses on the ground. That’s why we’re working with the Black South West Network’s hub in St Paul’s to open up access to the financial support and advice that can be so vital to their business.
Collaboration will be key to breaking down barriers – financial institutions and government should be engaging directly with business owners and community groups to understand the challenges they face and offer the support they need. If they can do so effectively, these businesses can achieve their potential to help drive the economy across the region and UK.
