90% of small business in the UK is led by a majority-white person. Here’s why

In a study by the UK government, only 1 in 5 start-up loans go-to black, Asian, and ethnic minority entrepreneurs. Considering the combined percentage of Black, Asian, mixed, or other ethnic groups are 13% of the UK population, a very small percentage of start-up capital is provided to Black entrepreneurs. This leads to severe inequalities within business support that produce 90% of small business in the UK that is led by a majority-white person.

Black households have 10 times less wealth than white British people

According to research by The Runnymede Trust, there are huge economic gaps that can have effects on future generations. The colour of money report discovered that white British households hold on average £282,000 in comparison to Black African and Caribbean households that hold on average £30,000 or less.

5.7 Black entrepreneurs per 10,000 people receive a start-up loans

In a published race disparity report that made it clear that the UK needs an urgent change to develop an inclusive economic environment. Nearly 8% of the ethnic minority population was involved in starting or running a new business — compared to 14.5% of the white population. In 2018, 5.7 black entrepreneurs per 10,000 people received a start-up loan, compared with 2.4 white entrepreneurs per 10,000 people. This has made it difficult for Black African and Caribbean entrepreneurs to develop small businesses.

83% Black professionals foresee that they will have to support older family members in the future

According to research by Old Mutual Savings & Investment Monitor 83% Black professionals foresee that they will have to support older family members in the future. This is what is commonly called the “Black tax” and can be considered a contributing factor to the low number of small-businesses led by a majority-black person. According to John Manyike, “While the efforts made through black tax benefit individuals and communities, these very same efforts can, inadvertently, create a cycle of financial adversity,”.

Although the Black Lives Matter movement has shed a light on ethnic disparities in the UK, support, and funding for Black entrepreneurs remain scarce. The wealth gap emphasizes the urgency for the Black community to support Black businesses by patronising Black businesses. To discover alternatives to popular brands visit Black AlternativeTo and support the development of Black communities.