The long pandemic – now in its fourth major wave in the US, with a death toll reaching over 900,000 – has so deeply impacted daily life that it is challenging to take stock of its effects.

On the economic front, small business closures were one of the most visible early pandemic losses. As with so many aspects of COVID-19, these closures had a more severe impact on people of color. In the first months of the pandemic, the number of active Black-owned businesses fell by 41 percent, and the number of Latinx-owned businesses fell by 32 percent, or approximately 1.5 to 2 times the overall closure rate.

By 2022, what is becoming clearer is that the effects on small business have extended beyond the early, public health-related closures: the pandemic years have exacerbated the gulf between large corporations and smaller establishments. (Corporate wealth both tracks with and helps create the yawning wealth gap for individuals – between mid-March 2020 and October 2021, US billionaires saw their net worth rise 70 percent, to over $5 trillion, while renters around the country now owe landlords $23 billion.)

For example, 2021 ended with S&P 400 companies reporting an almost 60 percent increase in profits, compared with the last quarter of 2019 – before the pandemic started. In contrast, in January of 2022, two-thirds of small business owners reported that the pandemic negatively impacted them moderately or a great deal, according to the Census’s Small Business Pulse Survey.

Non-business owners may experience this power and wealth shift between small business and large corporations in the form of shuttered main street businesses replaced by grocery delivery services–or by nothing at all. But for business owners themselves, especially entrepreneurs of color, women-owned firms, and/or immigrant-owned establishments, the direct loss of livelihood and wealth has been devastating.

Fortunately, the pandemic has also sparked experimentation and extraordinary efforts, especially at state and local levels, to support equitable small business recovery. (LISC itself has been involved in this work, supporting 12,000 businesses with, in 2020 – about 90 percent to entrepreneurs of color and 66 percent to women-owned businesses.)

A detailed new playbook, Equitable Pathways to Small Business Recovery: An All-Hands Approach, is a collaboration between LISC and Next City and was supported by the Bill and Melinda Gates Foundation. It documents promising strategies employed by state and local government – importantly, in partnership with many different stakeholders, from organizations that provide small business development services, to CDFIs, to local and ethnic chambers of commerce representing BIPOC entrepreneurs themselves.

Read the full article about small business recovery by David M. Greenberg and Patricia Voltolini at LISC.