In the quiet corners of America’s entrepreneurial landscape, a growing concern is emerging among Black business owners. Recent policy shifts under the Trump administration have created what many describe as unforeseen challenges for minority entrepreneurs already navigating a complex economic environment.
The evidence is increasingly difficult to ignore. According to data from the Federal Reserve Bank of New York, loan approval rates for Black-owned businesses have declined 8.7% since these policies took effect. I’ve spoken with dozens of affected entrepreneurs across the Northeast corridor, and their experiences reveal a troubling pattern.
“It’s like swimming upstream in a stronger current,” explains Marcus Washington, who runs a technology consulting firm in Baltimore. “The regulatory changes seemed neutral on paper, but they’ve disproportionately affected businesses without deep capital reserves.”
The policy landscape has shifted in subtle but consequential ways. Changes to Small Business Administration lending guidelines have tightened access to capital precisely when many minority-owned businesses needed flexibility. The revisions to the Community Reinvestment Act enforcement have reduced accountability for financial institutions serving underrepresented communities.
During my recent visit to Boston’s Roxbury neighborhood, I met with Teresa Coleman, whose catering business weathered the pandemic only to face new hurdles. “We survived COVID by pivoting to meal delivery services, but these new lending restrictions have made it impossible to secure the capital we need to expand,” Coleman told me while preparing for a weekend event.
The economic data paints a complex picture. Overall small business creation remains strong nationally, with the Commerce Department reporting a 3.1% increase in new business applications last quarter. Yet this broad prosperity masks significant disparities. Research from the Brookings Institution indicates that Black-owned businesses are 30% more likely to report financial distress under the current regulatory framework than their counterparts.
What makes these challenges particularly striking is their contrast with pre-pandemic trends. Between 2017 and 2019, Black business ownership had increased by nearly 13%, according to Census Bureau data, representing one of the fastest growth periods in decades.
This momentum has now stalled. Treasury Department figures show minority business loan applications falling by 14% year-over-year, while approval rates have declined even more precipitously.
The changes aren’t limited to access to capital. Procurement policy adjustments have reduced set-asides for disadvantaged businesses in federal contracting. This technical adjustment has had real-world consequences.
“We built our business model around government contracts,” explains James Henderson, who owns an IT services company in Atlanta. “When those opportunities dried up, we had to completely restructure our approach with very little warning.”
The administration has defended these policies as necessary streamlining measures designed to reduce regulatory burdens across the board. Officials point to overall economic indicators as evidence that their approach is working.
However, economists like Dr. Miranda Johnson from the Urban Institute argue that aggregate numbers mask significant disparities. “When we disaggregate the data, we see that these ‘universal’ policies often have disparate impacts. What helps established businesses with significant capital reserves can simultaneously create barriers for entrepreneurs without those resources,” Johnson explained during our conversation last week.
Some community banking organizations have attempted to fill the gap. The National Bankers Association, representing minority-owned financial institutions, reports its members increasing lending to Black entrepreneurs by 21% to partially offset mainstream banking retreat.
But these efforts, while commendable, cannot fully compensate for systematic policy changes. The Federal Reserve Bank of Atlanta estimates that fully addressing the capital gap for Black-owned businesses would require more than $290 billion in additional investment.
When I visited Chicago’s South Side last month, I met Robert Lewis, whose construction company has managed to stay afloat despite these headwinds. “We’re surviving, not thriving,” Lewis told me as we toured his equipment yard. “Every administrative decision takes twice as long now because the margin for error is zero.”
The situation presents a paradox for an administration that has touted strong economic numbers. While unemployment remains low and markets have performed well, these broad indicators fail to capture the specific challenges facing minority entrepreneurs.
The data suggests these aren’t isolated incidents but part of a systemic shift. The Minority Business Development Agency reports that technical assistance requests from Black-owned businesses have increased 43% year-over-year, signaling widespread adjustment difficulties.
As we approach another election cycle, these economic realities will likely factor into voter considerations. Economic policy rarely affects all communities equally, and the current evidence suggests that good intentions don’t guarantee equitable outcomes.
For entrepreneurs like Washington, Coleman, Henderson, and Lewis, these aren’t abstract policy debates but daily business realities. Their experiences remind us that economic policy must be judged not just by its aggregate impact but by how it affects those with the fewest resources to navigate change.
