6 Economic Policies Quietly Affecting Black-Owned Businesses

Black-owned businesses continue to be a significant yet underutilized source of economic expansion throughout the United States. However, some federal economic policies are influencing their prospects (and constraints).

These include ways that many entrepreneurs perceive but few mainstream media outlets have adequately described.

Here is a closer look at six significant policy variables that are currently subtly affecting Black business owners.

1. Federal Contracting Goals and Procurement Policy

Federal contracting policy has long been a key pathway for expanding opportunities for Black-owned businesses, particularly through programs for small disadvantaged businesses (SDBs). This is a category that includes many minority-owned firms.

Under the Biden administration, the federal government set a non-statutory goal of increasing the share of federal contract dollars awarded to SDBs to 15 percent by fiscal year 2025, positioning the target as a way to accelerate participation beyond long-standing statutory minimums.

That commitment, however, was not sustained. The executive action supporting the 15 percent goal was later repealed, and federal contracting benchmarks reverted to statutory minimum levels.

For Black business owners, the withdrawal reduced agency-level pressure to expand participation, leaving many of the structural barriers intact.

The rollback reinforced long-standing patterns in which federal contracting remains concentrated among larger, established firms, limiting the policy’s intended impact on Black-owned businesses.

2. Shifts in Supplier Diversity and DEI Policies

After 2020, a number of corporate supplier diversity and DEI (diversity, equality, and inclusion) efforts grew, giving Black-owned brands more retail opportunities and visibility.

However, according to Vogue, Black businesses that depended on these channels for distribution and sales growth have been directly impacted by recent corporate rollbacks of these programs, particularly by large retailers reducing their DEI obligations.

The reduction of these initiatives illustrates how corporate policy changes can result in significant financial challenges for companies that previously profited from inclusion initiatives.

3. Access to Capital and SBA Loan Distribution

Capital access is greatly influenced by federal small business lending rules, especially those implemented through the U.S. Small Business Administration (SBA).

Black business owners only received a minuscule portion of the tens of billions of loans that the SBA issued in FY 2021. Forbes reported roughly 8% of 7(a) loans and 3.6% of 504 long-term asset loans in 2023 went to Black entrepreneurs.

Despite widespread SBA assistance, these discrepancies point to fundamental problems with the way financing programs are accessed, underwritten, and distributed. These are problems that have an impact on firm lifespan and development potential.

4. Place‑Based Investment Incentives and Tax Credits

The goal of federal initiatives like the New Markets Tax Credit (NMTC) and Empowerment Zone incentives is to attract capital to areas with a high concentration of Black-owned enterprises.

Although they have provided investors with taxpayer-backed incentives, the extent to which Black entrepreneurs directly profit varies based on the area, the availability of financial partners, and small firms’ capacity to link with those investment flows.

5. Local Government Contracting and Policy Rollbacks

Policies that once promoted minority business participation are under pressure at the local and state levels. For instance, due to federal compliance concerns, San Antonio officials discreetly eliminated a mandate that a significant portion of subcontracted work go to women-owned and minority-owned businesses.

Critics claim this retreat undermines a key driver of economic growth for Black and other marginalized business owners.

Opportunities that previously helped standardized public contracts and similar local policy changes may diminish procurement.

6. Advisory Bodies and Equity‑Focused Federal Initiatives

Some federal initiatives aim to advance equity analysis in economic decisions in the current economic policy environment. For example, the U.S. Treasury established the Treasury Advisory Committee on Racial Equity to provide guidance on capital flows, equitable implementation of significant legislation, and fair tax policy.

Although these organizations don’t directly offer funds, their efforts have an impact on the development of policies, including those pertaining to tax administration and relief initiatives.

Their presence may change the legislative landscape for Black entrepreneurs by signaling a shift toward measuring racial and ethnic disparities.

Why These Policies Matter?

When taken as a whole, these policies highlight a complicated reality: that even with the best of intentions, public and private economic policies don’t always provide Black-owned companies with fair access or results.

Opportunities are created by some, others fail, and many rely more on execution than on intention.

In order to lessen inequalities in firm ownership, income, and long-term wealth creation, the community must comprehend these nuanced policy implications.

Looking Ahead

Such policies will continue to influence Black companies’ success in a volatile political and economic environment.

Current data and reporting make it abundantly evident that legislation on its own is insufficient without accountability, open metrics, and ongoing interaction with Black business owners.