On any given day, Dina Helen Essoka balances a corporation dealing in both private security services and African food products. Essoka described a challenging debut for the business created just last year, finding difficulty in securing funding to cover the start-up costs. Essoka relied on her own out-of-pocket funds and soon, the business found its footing.
“It was going really well until the pandemic came in,” Essoka told Yahoo Finance Canada, “Then everything just went down completely because I couldn’t have anybody come in anymore to pick up [foodstuff] and even the construction sites that we had promises to provide security services for had stopped work.”
Essoka was able to take advantage of the Canada Emergency Business Account (CEBA), though she explained how the funding was insufficient for her to employ staff. This left her doing most of the work by herself and covering the costs of moving her food business to an e-commerce platform. In the face of a second wave in Canada’s major cities, costs like PPE and plexiglass are added expenses that businesses like Essoka’s will have to fund.
The federal supports for Black business owners, including a $53 million National Ecosystem Fund and Black Entrepreneurship Loan Fund providing loans between $25,000 and $250,000, announced at the beginning of September give Essoka optimism.
“I will personally benefit from that because honestly it’s not been easy as a Black business owner,” Essoka said. “I think I have had some kind of restriction as a Black business owner. I’ve had several cases where I will be eligible, I’ll meet the criteria with my banks and everything – I’ll still not get the money.”
The Issue with Timing
Andria Barrett, the president of the Canadian Black Chamber of Commerce (CBCC), says this is a challenge many Black business owners face. It’s a problem she hopes the federal supports can address, calling the move a step in the right direction – but there’s an asterisk.
“The asterisk is, business owners need this money now,” Barrett said, adding that she understands these programs take time to be rolled out. “Will we be seeing this in the fourth quarter of this year? Will we see this in the first or second quarter of next year? We’re just concerned that the money may not come fast enough.”
Barrett adds that the community wants to be sure that they have space at the table to voice their concerns and provide flexibility. For example, the loans ranging from $25,000 to $250,000 would help many Black business owners, but there are some businesses that need smaller loans. “We hope that they continue to reach out to us at the chamber for input so we can help them create something that is realistic and something that’s truly valuable for our members.”
Other issues came up, such as business owners being unable to qualify for the grant opportunities in place. Organizations like the CBCC have raised the alarm on issues faced by Black entrepreneurs for a while (such as inaccessible loan support, being left out of procurement agreements, challenges in finding commercial rent accommodations, and a lack of corporate diversity) and 2020 is the year the government acknowledged these challenges. If Barrett had to give them a grade, she leans towards a B-.
“Why? Because we have no money,” she said of her organization. “We’re a chamber of commerce with no fundraising events, and we are now helping any and everybody regardless if you are a member or not. We haven’t received any funding.”
Canadian Businesses Step Up for Better Economic Outcomes
It isn’t just the federal government putting the issues of Black businesses in the spotlight this year, organizations like the BlackNorth Initiative have established a pledge for other CEOs to sign to end systemic anti-black racism in Canada’s financial sector. In late September they announced that CEOs from 336 Canadian companies had signed the pledge – a boost from the 100 signatures gathered by July. The initiative sets seven goals and specific targets with timelines, like ensuring that 3.5 per cent of Canadian executive and board roles are held by Black leaders by 2025.
Dennis Mitchell is the CEO of independent asset management firm Starlight Capital. Mitchell is also one of the founders of the Black Opportunity Fund, a coast-to-coast organization that represents the Black community all over Canada. He says supporting Black business goes beyond giving an underserved community a leg up in the financial sector, but it also brings broader economic benefits. Mitchell referenced a Citi Group report finding that systemic racism cost the U.S. economy US$16 trillion over the past two decades.
In Canada, similar wealth and income disparities were captured in a report by the Canadian Centre for Policy Alternatives. It starts with education, with Mitchell pointing to reports of Black school children in Ontario facing harsher punishments for minor transgressions and perceived discrimination from school staff.
“That has the impact of making school an undesirable place for them to be,” Mitchell explained, “For those firms to say they only recruit from the best schools, they only hire the best candidates. I say the lie to that is the fact that a lot of some of the potentially best candidates have been streamed out before you ever had a chance to see them.”
Mitchell says he’s very confident in the federal supports and the hint of more to come further drives that optimism. He adds that it’s now up to the Canadian corporate world to understand the totality of the obstacles facing Black entrepreneurs and employees as well as the economic consequences these barriers bring.
Like many business owners, Essoka feels the urgency of financial shortfalls and hopes the federal supports for businesses like hers are available when she needs them.
“We need these funds to expand business, we need these funds to create jobs, we need these funds to create work. I’m just trying to plead that this should be really taken seriously, and this should give sufficient encouragement to black businesses so we can do something great to boost the economy.”