Visa is offering $100,000 in grants to U.S.-based, black-women-owned businesses as part of a series of recent initiatives to support small businesses. The application process opens today and extends through July 31, 2020.
Grant recipients will receive mentoring by private coaches, educational resources, connection with a network of female business owners, and an annual membership in IFundWomen, a platform that provides funding and coaching to women-owned businesses.
The grant program will award 10 $10,000 grants via IFundWomen, with the goal of helping to close the funding gap for the black women entrepreneurs who receive it. Businesses do not have to have employees on payroll to qualify for a grant.
“The $10,000 is not a random number,” says Suzan Kereere, Visa’s global head of merchant sales and acquiring. “For many entrepreneurs, when they look for seed funding or funding to go from proof of concept to launch, the sweet spot is about $10,000. The $8,000 to $14,000 range is the amount of capital you need to get an ordinary small business off the ground. One of the reasons so few businesses make it into the venture capital stage is the majority will need about that much capital to get started. We’ve got to give them the kind of capacity and elasticity they need that works at the scale the majority live in.”
Black women entrepreneurs start businesses at a higher rate than the rest of the population. However, black-owned businesses have been hurt by the pandemic more than other businesses, with a 41% drop in active business owners between February and April, compared to a 22% decline for all small business owners, according to research from the Stanford Institute for Economic Policy Research. The number of black-owned businesses faced a decline from 1.1 million in February to 640,000 in April, based on monthly data from the Current Population Surveys.
One reason the study cited is that businesses owned by minority entrepreneurs, women, and immigrants are more concentrated in industries that were hit hard by the pandemic, but other factors, such as historic lack of access to capital, likely played a role.
Visa last week announced a global commitment to help 50 million small and micro businesses recover from COVID-19 by enabling digital payments, helping them to build online businesses and incentivizing neighborhood support.
Visa has found that how much people spend online is rising around the world, with a 25% increase from January to April in spend per average cardholder. This presents an opportunity for small businesses that are set up to make the most of digital technology but could be an obstacle for those that are not yet very tech-enabled. “We wanted to make sure small businesses were not left behind because of the migration to digital,” says Kereere.
Visa has opened localized online resources centers in more than 20 countries that now offer help with how to run a “digital-first” small business. In European markets, Visa has been investing in increasing the number of digital payment acceptance devices It has also launched the Back to Business project, which helps consumers identify businesses that are back open locally in the U.S., Australia and New Zealand.
The payments company recently created the Visa Economic Empowerment Institute, focused on both economic and societal issues, such as the challenges the pandemic has brought to small businesses and the racial and gender opportunity gaps.
The goal is to help governments and NGOs involved in enabling funding and informing funding providers to do so in a more direct and data-driven way, says Kereere. “Using data can help them draw out insights to give them enough information to refine policy and decision-making,” she says.