Black Entrepreneurs, Frustrated by High Rates, Look to the Election

May 1, 2024

Black voters are a crucial bloc in Georgia; four years ago, they made up 27 percent of the electorate. By many indications, Black Americans are disproportionately affected by higher interest rates on mortgages, credit cards, student loans and business debts. Start-up companies owned by people of color — especially Black Americans — confront substantial barriers in raising funds, making them more vulnerable to increased borrowing costs, according to a survey of minority-owned small businesses by the Federal Reserve. Though their companies are typically smaller and less profitable, Black and Hispanic entrepreneurs tend to be rejected on applications for financing even after accounting for differences in credit ratings, suggesting that racial profiling is an issue.

“It’s hard for people like me to raise capital,”

said Veronica Woodruff, the founder of Travelsist, a company in Atlanta that pairs travelers who need help navigating airports with support from companions. “I’m an African-Latina woman, and I’m in the South. It just makes it hard to get in front of people who are writing checks.”

Ms. Woodruff, has already raised $1.1 million, including a $250,000 grant from the Fearless Fund, a nonprofit that seeks to address the shortage of capital for businesses owned by women of color. The organization has been hamstrung by a lawsuit from an activist group that says directing funds to minority women is racial discrimination.

Ms. Woodruff is seeking $8 million in additional investment to expand her business. Rising costs have forced her to increase wages to $20 an hour from $15. Venture capitalists are demanding sweeter terms for their investments. Raised in California, she considers herself a liberal who values civil rights. But as the overseer of a business, she is struggling to decide how to vote. “I’m taking a lot of risk here,” Ms. Woodruff said. “It’s for everyone, for all of my employees, for everyone who has equity in this company and the communities that we operate in.”