This is partially due to the fact that banks primarily issued loans to existing customers to expedite the approval process. This puts women (and especially women of color) business owners, many of whom did not previously have commercial banking relationships, at a disadvantage.
“We already face an uphill battle in what’s the number one financial challenge across the board for all business owners, which is access to capital,” Khalfani-Cox says. “Now with the pandemic, we’re seeing a lot of small businesses struggle even more.”
Further, in reference to the barriers to funding even in the current climate, she says, “Minority and women-owned businesses [are] being marginalized through various structural inequalities, and systems and processes that weren’t mindful—and sometimes outright exclusionary—in helping businesses who needed the most aid.”
How can Black women protect themselves?
With traditional funding out of reach and the future of their livelihood hanging in the balance, Black women entrepreneurs may be desperate for solutions, making them prime targets for financial scams. What are some tangible ways that Black women can protect themselves from scammers, especially when they’re fighting to keep their businesses afloat?
Those in need of support can join online communities like the Facebook group Hustle Crew, which has over 17,000 members and shares ongoing resources for business owners of color. Being in a group among fellow entrepreneurs and asking questions can help Black women stay vigilant, which Khalfani-Cox says is the best line of defense during this time.
“Women who are business owners need to be mindful about giving out any personal or business information, especially when they’re in a dire financial situation,” she says.
“Scammers will make outlandish promises like a 100 percent guarantee or that they can double your money overnight,” she continues.
This is a tactic that exploits what Khalfani-Cox describes as “confirmation bias,” which is the inclination to believe what you already hope to be true. And when you’re in a crisis, it’s much easier to trust someone who says what you want to hear, rather than admit that it’s not real.