The Service Sector and
Small businesses have been decimated

 

This has led to unprecedented unemployment and a critical economic downturn. Our economy-focused cohort will partner with nonprofits serving and supporting retail/service workers and women and minority-owned small businesses. Many of these nonprofits have seen an immediate need to create new digital tools and processes to support the millions that have been disrupted across the state, and importantly, in our city centers. Solving for this has the possibility of not only serving newly displaced workers but also creates new support networks for job seekers and those experiencing homelessness.

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The concentration of minority-owned small businesses in the service sector (food services, laundry, retail, accommodation, etc.) makes them most susceptible to business disruption in the near-term. Underlying systemic issues put many of these businesses in “financially precarious positions” before the pandemic. They will now have to contend with higher cost operating structures to adapt to COVID-related restrictions or safety practices but lack the financial means to weather an extended cutoff of cash flows.
 

• Minority-owned small businesses are approximately 2x as likely to be classified as “at-risk” or “distressed” compared with non-minority-owned small businesses. “Distressed” companies are 3x more likely to close because of a two-month revenue shock

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• Large banks approve ~60% of loans sought by white small-business owners vs 50% of Latinx and just 29% by Black small-business owners 

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• 90% of minority-owned businesses are estimated to have had their PPP requests rejected

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Ensuring that these businesses and the workers they employ survive will require fundamental shifts in how private-, public-, and social-sector organizations come together to support them.

Thank You Okta

Okta for Good Provides Grants and Hands-On Technical Assistance

for New Economic Security Initiative