New Orleans is among the top 50 US metros for Black-owned businesses

Written by nolaba on March 19, 2024. Posted in News.

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By Mason Harrison
Contributing Writer

A new report by one of the country’s largest lending platforms is declaring New Orleans among the “top 50 U.S. metros where Black-owned businesses are most prominent,” ranking the city 18th on the portion of ventures owned by Black entrepreneurs and 30th overall in total number of Black firms.

LendingTree, a North Carolina-based digital marketplace for a range of debt instruments, issued the report on February 5 against the backdrop of Black History Month to assess the state of Black enterprise in America. The company, known for the slogan, “When banks compete, you win,” found, however, that lenders do not compete to originate loans on behalf of Black proprietors and offer inferior loan products instead.

“A lot of it is really just racism,” says Matt Schulz, chief credit analyst at LendingTree, describing the obstacles many Black entrepreneurs face when seeking to secure capital for their businesses. “There is no question that discrimination is part of the reason why some banks are reluctant to lend to Black firms.”

The report also cites lacking “a solid business plan,” “starting a business with little to no money,” “succeeding in your first year” as an entrepreneur, “accessing startup business loans,” knowing how to “prevent small business failure,” and “navigating state-specific small business resources” as parts of the labyrinth of landmines many would-be Black business owners succumb to before achieving financial success.

It is within this context that the New Orleans Business Alliance, the city’s decade-old public-private economic development engine, is attempting to “strengthen Black-owned businesses across the city,” according to recently-minted president and CEO, Louis David. “NOLABA is dedicated to growing jobs and investment in the [local] economy through the lens of equity, and many of our programs [do just that].”

Two programs of particular importance to David are InvestNOLA, which helps scale small firms with high-growth potential owned by entrepreneurs of color, and the Resilient Corridor Initiative, a program that supports small businesses located along major thoroughfares in historically Black business districts.

NOLABA is also spearheading the supplier diversity program for the 2025 Super Bowl in New Orleans.

A recent federal court ruling, however, could put these programs at risk. In June, the U.S. Supreme Court rejected race-conscious admission to colleges and universities, leading to a cascading effect in the private sector and civil society in which businesses and charitable organizations, under threat of litigation, adopted race-blind policies and procedures or amended their operations to be less racially aware.

“It is on our radar,” David says, referring to the recent spate of legal challenges to race-based programs. “This is definitely something we have discussed at the office, but I have not heard anything to suggest that there will be an impact locally. Should such a challenge arise, I think it is extremely important that we support Black businesses, many of which are small businesses. We are, after all, a small business city.”

But if, in a post-affirmative action legal environment, programs like InvestNOLA and the Resilient Corridor Initiative are gutted or watered down, David says a potential funding source for Black business owners lies in the private sector.

“It will be interesting to see if all of the promises and pledges from large companies come through,” he says, referring to the nearly $50 billion in commitments made to racial justice following the death of George Floyd, with another almost $300 billion in pledges from other entities.

But such commitments have been made before. Corporations promised billions, in today’s dollars, to address racial disparities after the riots of the 1960s, most of which, however, never came into being.

“There is a history of Black capitalism being promoted as the solution to Black inequality,” says Jared Ball, professor of Africana and communications studies at Morgan State University and author of The Myth and Propaganda of Black Buying Power. “But we have at least 100 years of data to counter this notion.”

Ball recommends alternatives to Black entrepreneurialism that are focused on redistributive economics.

“If, for example, we were to allocate as little as one percent of the annual gross domestic product to public welfare we could mitigate many of the issues we experience in our communities and there would be no need to argue with one another over a perceived failure to support each other’s Black ventures.”