Financing and Capacity Building

One of the objectives of CRICC is to build wealth and capacity of the minority business community to create larger businesses that can handle larger contracts and employ more people. African Americans are 13% of the US population and own 2.2M businesses which is 9.9% of all businesses. However, African Americans only generate less than 1% of the total revenue of US businesses. Black-owned businesses have historically faced systemic barriers to accessing capital, resources, and opportunities, which have contributed to the disparities in business ownership and revenue. CRICC plans to address these disparities and support the growth and success of Black-owned businesses. CRICC, through it’s Board of Directors, its Advisory Committee and its extended business network built over years of engagement in various minority business development activities, has access to a variety of minority business-friendly banks, venture capitalists, and alternative financing sources to assist business launch and growth.

One of the major reasons for business failure is the lack of capitalization. The majority of minority businesses are financed through personal assets or those of family and friends. Because of economic dipartites resulting from decades of discrimination, the median net worth for white families younger than 35 is $25,400, according to the Federal Reserve, compared with just $600 for Black families younger than 35. Black Americans have far less wealth as of the third quarter of 2022, according to the Federal Reserve. This means that Black Americans in particular will be challenged to start and grow businesses with sufficient capitalization to get past the 3 year threshold that typically defines whether a business will survive. New businesses need 1 year to get its products and services launched and do initial marketing to capture its initial customers. The 2nd year normally focuses on fixing its supply chain and customer service model while adjusting the opening assumptions in the business plan based on real market feedback. By the 3rd year, the new business should be on a solid foundation and looking toward scaling up options. Without sufficient capital, new businesses are trapped in the 2nd year without resources to adjust its supply chain, staff and marketing to adjust its products and services to real situations. CRICC is committed to providing information, access and contacts to a variety of financial resources.

Even when a Black business begins to succeed, it is hampered by the next factor: the average Black business has only $1.2M in receipts versus a White-owned averaging $8.5M in receipts. This low revenue allow limits the ability of Black businesses to get the capital needed to expand. CRICC has the ability to provide operational guidance to assist businesses to reorganize, re-structure, and otherwise improve the balance sheet to increase revenue and qualify for additional financing and capital.