Black Americans don’t often have a lot of wealth passed down, Obi said, so entrepreneurship can offer a “more realistic path” to create wealth.
“Entrepreneurship, I think, is a great equalizer,” he said.
Obi helped establish the Urban League’s entrepreneurship center back in 2004. In 2019, he helped launch the UBIZ Venture Capital fund, so that the Urban League could offer what he called a “complete suite of services,” including lending, to small businesses.
“Because we know that access to capital continues to be a barrier to small business growth,” Obi said.
In its 2020 “Closing The Racial Inequality Gaps: The Economic Cost of Black Inequality in the U.S.” report, Citi contends that, had the Black wage gap been closed over the previous 20 years, it would have added $2.7 trillion in income. In total, not addressing racial gaps in wages, housing, education and investment could have cost the U.S. economy up to $16 trillion in that time.
Black entrepreneurs are more likely to have to rely on their own funding, or on funding from family, friends or employees, the report said, and they’re less likely to receive loans or investment funding.
“Black entrepreneurs suffer not from a lack of vision, but a lack of funding along every point in the investment cycle. Funding is a challenge over the phases of start-up and as the business matures,” the report said.
Carasai Ihentuge, owner and operator of YumVillage in Cleveland, said he started working with a business adviser at the Urban League before he opened his restaurant’s doors in November of 2021. YumVillage is a fast-casual Afro-Caribbean spot on the Cleveland State University campus. There are also locations in Detroit run by Ihentuge’s brother, who started the family-run restaurant chain.
After getting his location up-and-running, he got involved in the organization’s Black Restaurant Accelerator Program. The program helps restaurant owners and managers learn about everything from ordering products to hiring staff to debt-to-income ratios, Ihentuge said. And graduates of the program have access to small grants to help with whatever they may need. Businesses need equity to put down in order to get loans, like those from the SBA, Ihentuge said. Grants or programs like these help entrepreneurs “overcome certain barriers,” he said. But entrepreneurs have to know to look for them.
“As an entrepreneur, you have to be willing to look and search for those opportunities, because they’re not just going to come to you,” he said.
Before launching UBIZ, the Urban League would send the small businesses and entrepreneurs it worked with to more traditional lending options, and it wouldn’t always know why people would get turned down. The Urban League, through UBIZ, can work through challenges like past financial mistakes with the entrepreneurs it’s loaning to; there’s a relationship there, and resources to support the business owner in the skills they may need.
Before the launch of the entrepreneurship center, the Urban League focused primarily on employment and education, Obi said. But as Black workers lost their manufacturing jobs to layoffs in the early 2000s, the importance of helping people create their own businesses became clear.
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