Black Businesses Lean In Amid Declining External Investment As Investment Falls, Community Lifts Black-Owned Firms in Los Angeles

Across Los Angeles, Black-owned businesses are leaning on one another as external funding dries up. Spectrum News reports that in 2024, the Small Business Administration approved 5,054 loans to Black-owned businesses (totaling $1.4 billion), while white-owned businesses received a staggering $12 billion spectrumlocalnews.com+3spectrumlocalnews.com+3spectrumnews1.com+3.

Entrepreneurs like Blake Van Putten (CISE fashion house) and Jonathan Kinnard (Coffee Del Mundo) emphasize community support as essential "lifelines"—blunting the decline in corporate and grant-based investment spectrumlocalnews.com.

Data Snapshot: The Investment Gap

• Outside funding disparity: Black startups receive an average of $500, compared to $18,500 for white-led startups spectrumlocalnews.com+1instagram.com+1.

• Financing approval disparities: Black founders are about half as likely to secure full funding compared to white founders .

• Community capital mobilization: The Serving Spoon in Inglewood raised $150,000 through local support to stay afloat spectrumlocalnews.com+2spectrumlocalnews.com+2spectrumnews1.com+2.

Systemic Challenges Driving Community Reliance

1. Investor retreat post-racial reckoning
   The surge of support following 2020’s racial justice movement has faded, prompting Black entrepreneurs to depend more heavily on peer and community funding spectrumlocalnews.com.

2. Institutional financing imbalances
   SBA loans show drastic racial discrepancies—only 5K+ loans to Black businesses versus $12B issued to white-owned firms cbcfinc.orgspectrumlocalnews.com.

3. Community networks as economic anchors
   As capital sources shrink, intra-community collaboration—via referrals, crowdfunding, and mentorship—becomes vital to survival and growth .

Implications for NBCC Stakeholders

• Awareness & Advocacy
  Elevate the conversation around the glaring capital disparity and push for equitable SBA allocations and federal support.

• Community Capital Models
  Showcase BBLA, entrepreneurship hubs, and Black Chambers as proven frameworks for peer-to-peer funding and mutual aid.

• Alternative Financing Support
  Advocate for expanded support of CDFIs, microloan funds, and equity crowdfunding platforms to fill systemic funding gaps cbcfinc.org+1thirdway.org+1thirdway.org.

Strategic Recommendations for NBCC

Outlook

As external investment wanes, Black businesses are turning inward—highlighting both a community resiliency and the systemic inequities still in play. For NBCC, this era presents a clear call to action: scale peer-driven capital networks, reform access to institutional funding, spotlight success stories, and foster alternative financing ecosystems. In doing so, NBCC can help drive sustainable economic progress and close the racial wealth gap.

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