State of Black Business | Full Report

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TABLE OF

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INTRODUCTION

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ABSTRACT

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The purpose and scope of the State of Black Business Report, situating the findings within Connecticut’s economic landscape and the lived realities of Black entrepreneurs across the state.

A concise overview of the report’s purpose, methods, key findings, and core recommendations for readers seeking a high-level summary.

EXECUTIVE SUMMARY This section distills the report’s most critical findings, insights, and recommendations, highlighting implications for policymakers, funders, and ecosystem leaders.

METHODOLOGY This section details the research design, data sources, and analytical approach used to collect, analyze, and interpret data on Black-owned businesses in Connecticut.

LIMITATIONS This section outlines the constraints of the data, methodology, and scope of the study, clarifying how these factors shape the interpretation of the findings.

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This section summarizes the report’s core findings, drawing from survey data and stakeholder input to surface key trends, challenges, and opportunities facing Black-owned businesses in Connecticut.

THEMES & RECOMMENDATIONS This section synthesizes key findings into cross-cutting themes and presents actionable recommendations to strengthen and coordinate Connecticut’s Black business ecosystem.

CONCLUSION This section reflects on the report’s key insights and underscores the collective actions needed to advance equity and long-term sustainability for Black-owned businesses in Connecticut.

REFERENCES This section documents the data sources, academic research, policy reports, and other materials that inform and substantiate the analysis and recommendations presented in this report.

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CONTENTS

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FINDINGS

LETTER FROM OUR CEO

LETTER FROM OUR CEO ConnCORP Family,

To the entrepreneurs who shared their stories: thank you. Your candor and commitment guide our work every day. To the stakeholders across ESOs, financial institutions, municipalities, universities, and philanthropy: this report invites you to join us in forging an environment where Black businesses can not only launch—but scale, sustain, and succeed.

Since our founding, ConnCORP has worked to advance economic justice and close the racial wealth gap in Connecticut. We believe deeply in the power of Black entrepreneurs to reshape communities, expand opportunity, and build pathways to generational wealth. The State of Black Business Report is part of our commitment to understanding the real experiences of Black business owners—and ensuring that their voices shape the systems intended to support them.

ConnCORP remains steadfast in our mission to invest in people, strengthen local economies, and expand economic power within our communities. We hope this report serves as a catalyst for meaningful action across the state.

This year’s report tells a story that is both inspiring and sobering. Black entrepreneurs across Connecticut are innovating, adapting, and building despite persistent barriers that should not exist in 2025. The data is clear: our ecosystem is strong, but inequities in access to capital, municipal support, business readiness resources, and coordinated ecosystem guidance continue to limit growth.

With gratitude and commitment, Erik Clemons Erik Clemons CEO ConnCORP

At ConnCORP, we see this report not as a critique of the system, but as a roadmap for what is possible when we choose to build differently.

Connecticut has the talent, the institutions, and the entrepreneurial spirit needed to become a national leader in equitable business development. What we require now is coordination, investment, accountability, and the courage to confront long-standing structural barriers.

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LETTER FROM OUR VICE PRESIDENT OF BUSINESS INCUBATION AND ENTREPRENEURSHIP Friends and Partners,

holder insights uncovered patterns that both confirm our concerns and illuminate new opportunities for growth. Entrepreneurs expressed the desire for coordinated guidance, deeper trust with financial institutions, clearer municipal processes, and more culturally relevant support. They also spoke about resilience, creativity, and the pride of building something meaningful in the face of obstacles.

When The Lab at ConnCORP was created, it was built with one purpose in mind: to experiment, innovate, and develop solutions that address the structural barriers facing Black entrepreneurs. We know that good intentions alone are not enough. Real change requires data, context, storytelling, and a clear-eyed understanding of the ecosystem as it actually functions—not as we imagine it.

This project reflects The Lab’s belief that research must lead to action. We are committed to translating these findings into real-world ecosystem changes—through pilot programs, partnerships, and new models of collaboration. We hope stakeholders across sectors will use this report as a tool to inform their strategies, expand their outreach, and close the gaps that have held Black entrepreneurs back for generations.

This is why The Lab invested in a yearlong effort to produce the 2025 State of Black Business Report. We set out to answer a simple but critical question: What does it truly feel like to be a Black business owner in Connecticut today?

The survey responses, interviews, and stake-

Thank you to every business owner who contributed, to every partner who supported this work, and to the ConnCORP team for championing a more equitable future. The Lab looks forward to continuing this work and building an ecosystem where Black businesses have everything they need not just to survive, but to thrive.

In partnership,

Jahkeeva Morgan

Jahkeeva Morgan Vice President of Business Incubation and Entrepreneurship The Lab at ConnCORP

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ABOUT CONNCORP

ConnCORP (the Connecticut Community Outreach Revitalization Program) is a mission-driven economic development organization founded to address racialized economic disparities by investing in people, businesses, and communities.

Rooted in the belief that equitable economic opportunity is essential for thriving neighborhoods, ConnCORP focuses on building strong local ecosystems where Black and Brown entrepreneurs can access the tools, capital, and support needed to grow.

ConnCORP works across multiple verticals—including real estate development, entrepreneurship, economic education, community wealth-building, and cooperative ownership— to strengthen the economic fabric of Connecticut’s urban centers. Through initiatives like The Lab at ConnCORP, our development project on Dixwell Avenue, and a range of entrepreneurial development programs, the organization drives catalytic projects that expand opportunity, narrow the wealth gap, and uplift historically marginalized communities.

ConnCORP focuses on creating pathways to economic ownership through entrepreneurship, business development, commercial revitalization, and strategic investment. The organization is guided by principles of racial equity, community-led development, and long-term investment in local talent.

ConnCORP serves as a convener, investor, advocate, and ecosystem partner—committed to building structures that allow Black entrepreneurs to thrive. The organization recognizes that individual success stories are not enough to close the racial wealth gap; broad structural change is required. ConnCORP positions itself at the center of that change.

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THE

THE STATE OF BLACK BUSINESS

THE IMPETUS FOR THIS REPORT Black entrepreneurship is one of the most powerful pathways to wealth generation, job creation, and long-term community stability. Across Connecticut, Black-owned businesses anchor neighborhoods, circulate local dollars, and create opportunities in places that have experienced decades of disinvestment. Yet despite their economic and social impact, Black entrepreneurs continue to face disproportionately high barriers at every stage of business growth. ConnCORP believes that eliminating these disparities begins with understanding them clearly, honestly, and at scale.

The State of Black Business Report is a tool for truth-telling. It was designed to move beyond anecdotes and assumptions and instead ground Connecticut’s economic development efforts in data, lived experience, and structural analysis.

Through this work, ConnCORP seeks to identify systemic inequities that shape business outcomes, improve coordination across the entrepreneurial ecosystem, expand access to capital, strengthen municipal partnerships, and inform more equitable philanthropic and policy strategies.

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This research is foundational to ConnCORP’s broader mission to close the racial wealth gap and build an entrepreneurial ecosystem that supports long-term Black economic mobility.

To accomplish this, ConnCORP—through The Lab at ConnCORP—led a yearlong research effort in partnership with The Narrative Project. The State of Black Business Project was designed to capture the realities of Black entrepreneurship across Connecticut by centering the voices of business owners themselves.

The project combined statewide survey data with demographic, operational, and financial insights, while also examining entrepreneurs’ experiences navigating ecosystem support organizations, municipal systems, and capital access.

In parallel, stakeholder interviews were conducted with ESOs, lenders, chambers of commerce, universities, and philanthropic organizations to better understand how institutional practices intersect with entrepreneurial needs.

Local findings were analyzed alongside national Black business data to situate Connecticut’s ecosystem within broader economic trends.

E STATE Taken together, this effort represents one of the most comprehensive examinations of Black entrepreneurship in Connecticut to date. The intention of the State of Black Business Project is not simply to document challenges, but to translate lived experience into actionable insight. ConnCORP aimed to produce a report that is both informative and catalytic—one that identifies barriers to business growth, assesses the effectiveness of existing resources, reveals gaps in the entrepreneurial ecosystem, and offers clear recommendations for cross-sector collaboration. Just as importantly, the project establishes a baseline from which future progress can be measured.

At its core, this work reflects ConnCORP’s belief that equity requires evidence—and that evidence must lead to coordinated action. To ensure the findings presented in this report are both rigorous and reflective of lived experience, the State of Black Business Project employed a mixed-methods research approach that pairs quantitative analysis with qualitative insight.

ABSTRACT The 2025 State of Black Business (SoBB) Report examines the conditions, challenges, and opportunities shaping Connecticut’s Black entrepreneurial ecosystem. Drawing on data from approximately 300 Blackowned businesses across the state, a facilitated focus group with business owners, interviews with ecosystem stakeholders, and comparisons to national trends, this report surfaces the structural barriers that continue to constrain business growth—while also highlighting the resilience, innovation, and community-rooted leadership that define Black entrepreneurship in Connecticut.

The findings underscore that while the ecosystem is rich in assets and entrepreneurial activity, it remains deeply impacted by inequities in access to capital, municipal systems, business readiness supports, and coordinated guidance. Entrepreneurs consistently report strong motivation and capability, alongside frustration navigating fragmented systems not designed with their success in mind.

Produced by ConnCORP through The Lab at ConnCORP, in partnership with The Narrative Project, this report offers data-driven insights and targeted, cross-sector recommendations aimed at strengthening coordination, rebuilding trust, and creating clearer pathways for Black-owned businesses to launch, grow, and scale. Together, these findings provide a foundation for action toward a more equitable, navigable, and sustainable entrepreneurial ecosystem in Connecticut.

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EXECUTIVE SUMMARY Black entrepreneurs are a vital engine of economic activity in Connecticut. They contribute to local job creation, neighborhood revitalization, cultural vibrancy, and generational wealth-building. Yet despite their economic potential, Black-owned businesses continue to face barriers far greater than their white counterparts—reflecting long-standing historical and systemic inequities that continue to shape outcomes today.

Findings from the 2025 State of Black Business Survey reveal several overarching and interconnected themes:

Key Findings ENTREPRENEURIAL READINESS IS STRONG, BUT BUSINESS OWNERS FEEL OVERWHELMED. Entrepreneurs reported difficulty navigating the volume and fragmentation of business information available to them. Many expressed uncertainty about which resources align with their stage of growth, how to evaluate their own readiness, and how to distinguish credible opportunities from noise. This aligns with national data showing that Black business owners are more likely to self-fund, delay hiring professional services, and struggle with administrative capacity.

ACCESS TO CAPITAL REMAINS THE GREATEST BARRIER. Survey respondents reported low confidence in banks, lending programs, and financial institutions.

Many cited difficulty meeting documentation requirements, fear of loan rejection, and a belief that lending systems are not designed to serve Black-owned businesses. Nationally, Black entrepreneurs are nearly three times more likely to be denied financing—even when controlling for credit score and revenue—and Connecticut reflects this same pattern.

MUNICIPAL SUPPORT IS PERCEIVED AS INCONSISTENT AND UNCLEAR. Entrepreneurs reported difficulty navigating the volume and fragmentation of business information limited supplier diversity opportunities, and minimal outreach from economic development offices.

A lack of municipal transparency contributes to slower business growth and reduced participation in public contracting opportunities.

NETWORKING IS HIGHLY VALUED BUT NOT EQUALLY ACCESSIBLE. Entrepreneurs expressed a strong desire for supportive, culturally competent spaces to build relationships, learn from peers, and collaborate. However, many reported barriers related to cost, time, geography, and lack of coordination across organizations, limiting their ability to participate consistently.

THE ENTREPRENEURIAL ECOSYSTEM IS FRAGMENTED. Connecticut has a rich network of entrepreneurial support organizations, incubators, chambers, universities, and financial institutions. Yet entrepreneurs often experience this ecosystem as disjointed.

Many struggle to understand who does what, which programs complement one another, and where to begin—leading to inefficiencies and underutilization of available resources.

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RECOMMENDATIONS In response to these findings, the report calls for a coordinated, statewide approach engaging five key stakeholder groups:

ENTREPRENEURIAL SUPPORT ORGANIZATIONS (ESOs)

MUNICIPAL ECONOMIC DEVELOPMENT OFFICES

CDFIS AND FINANCIAL INSTITUTIONS

UNIVERSITIES AND EDUCATIONAL PARTNERS

PHILANTHROPY AND NONPROFIT ORGANIZATIONS

Each group is provided with tailored recommendations designed to reduce fragmentation, expand access to capital and resources, and strengthen pathways from business launch to scale.

Taken together, the findings reinforce a clear message: Connecticut’s Black entrepreneurial ecosystem is strong, resilient, and full of promise—but structural barriers remain. Addressing these challenges will require intentional, cross-sector collaboration to ensure Black-owned businesses are not only launched, but positioned to grow, scale, and thrive.

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METHODOLOGY

The 2025 State of Black Business Project employed a mixedmethods research framework designed to capture both the measurable conditions of Black-owned businesses across Connecticut and the lived experiences behind those data points. This approach paired quantitative data collection with qualitative insight to ensure findings were both analytically sound and grounded in the real-world realities of Black entrepreneurship.

Survey Data Collection A statewide survey was distributed to Black-owned businesses across Connecticut through ConnCORP, The Lab at ConnCORP, and partner ecosystem networks. The survey was designed to capture a broad snapshot of the Black entrepreneurial landscape, including businesses at varying stages of development and across multiple industries.

The survey received approximately 300 responses from Black business owners and others from across the state. It collected data related to: • • • • •

Business owner demographics Business structure and day-to-day operations Access to capital and financial systems Experiences navigating entrepreneurial support organizations and municipal processes Perceived challenges, aspirations, and growth needs

The instrument included both closed-ended questions, allowing for quantitative trend analysis, and open-ended questions, enabling respondents to contextualize their experiences in their own words.

Survey respondents represented a range of industries, revenue levels, and stages of growth—from early-stage microbusinesses to more established firms—ensuring the findings reflect the diversity of Black business ownership in Connecticut.

Focus Group with Black Business Owners To deepen the qualitative understanding of survey findings, the project also included one facilitated focus group with approximately a dozen Black business owners. Participants represented a range of industries, including financial technology, farming, grant management, professional services, and other knowledge- and service-based sectors.

The focus group created space for business owners to collectively reflect on shared challenges, test emerging themes from the survey, and discuss how structural barriers manifest across different industries. This conversation provided richer context around issues such as capital access, administrative burden, ecosystem navigation, and the emotional labor of entrepreneurship—insights that may not surface through survey data alone.

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METHODO

While not intended to be statistically representative, the focus group served as a critical qualitative lens, reinforcing patterns identified in the survey and highlighting the nuanced ways entrepreneurs experience and respond to systemic barriers.

Stakeholder Interviews

To better understand how institutional systems intersect with entrepreneurial experiences, the project included conversations with key stakeholders across Connecticut’s business ecosystem. These included representatives from: • Entrepreneurial Support Organizations (ESOs) • Community Development Financial Institutions (CDFIs) and other lenders • Municipal economic development offices • Chambers of commerce • Universities and educational partners • Philanthropic and nonprofit organizations These discussions explored perceptions of Black entrepreneurs’ needs, gaps in existing services, institutional constraints, and opportunities for greater coordination. Stakeholder perspectives helped illuminate where ecosystem intentions and entrepreneur experiences diverge—and where alignment is possible.

Comparative and Contextual Analysis Survey, focus group, and stakeholder findings were analyzed alongside national Black entrepreneurship data to situate Connecticut within broader economic trends. This comparative analysis drew on research from the U.S. Small Business Administration, the U.S. Census Bureau’s Annual Business Survey, the Brookings Institution, McKinsey & Company, and national entrepreneurial support organization studies.

Benchmarking against national data allowed the research team to distinguish between challenges that reflect nationwide patterns—such as disparities in capital access—and those that are more specific to Connecticut’s local ecosystem.

Analysis and Synthesis Quantitative survey responses were analyzed to identify trends and patterns across key indicators including business structure, capital access, and support utilization. Qualitative data from open-ended survey responses, the business owner focus group, and stakeholder conversations were reviewed and coded to surface recurring themes and priorities.

Findings were synthesized through stakeholder triangulation, cross-referencing entrepreneur perspectives, institutional insights, and national data. Recommendations were developed to reflect both what entrepreneurs experience and where ecosystem actors have the greatest leverage to intervene.

This methodology reflects ConnCORP’s commitment to evidence-based equity: grounding strategy in data, centering lived experience, and translating research into actionable pathways for systems-level change.

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LIMITAT

LIMITATIONS

While the 2025 State of Black Business Project offers one of the most comprehensive examinations of Black entrepreneurship in Connecticut to date, several limitations should be noted when interpreting the findings.

First, survey responses were collected through ConnCORP, The Lab at ConnCORP, and partner ecosystem networks. As a result, respondents may be more connected to entrepreneurial support systems than Black business owners who are not engaged with formal networks. This may underrepresent the experiences of entrepreneurs operating entirely outside of institutional support structures.

Second, although the survey received approximately 300 responses from across the state, participation was voluntary and self-selected. As with most survey-based research, this introduces the possibility of response bias, as individuals experiencing either acute challenges or strong engagement with the ecosystem may have been more likely to participate.

Third, the project included one facilitated focus group with approximately a dozen business owners representing diverse industries. While this focus group provided valuable qualitative depth and helped contextualize survey findings, it was not designed to be statistically representative of all Black-owned businesses in Connecticut. Insights from the focus group should therefore be understood as illustrative rather than generalizable.

Fourth, stakeholder interviews reflect the perspectives and practices of participating institutions at the time of the study. These perspectives may not fully capture variation across all organizations, municipalities, or regions within the state, nor do they necessarily reflect recent changes or reforms implemented after data collection.

Finally, while national datasets were used for benchmarking and contextual analysis, differences in data collection methods, definitions, and reporting timelines between national sources and this project may limit direct comparisons. National trends are included to provide context rather than exact equivalency.

Despite these limitations, the mixed-methods design—combining survey data, qualitative insight, stakeholder perspectives, and national benchmarking—provides a robust foundation for understanding the current state of Black entrepreneurship in Connecticut. The findings should be interpreted as directional and actionable, offering a credible evidence base to inform policy, investment, and ecosystem coordination moving forward.

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TIONS

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FINDINGS

Results Overview The 2025 State of Black Business Survey presents a layered picture of how Black entrepreneurs in Connecticut are building, sustaining, and working to grow their businesses within an ecosystem that is both rich in opportunity and constrained by structural inequities. The findings that follow synthesize quantitative survey data with national trends in Black business development to provide context and depth.

For clarity and accessibility, results are organized into major thematic areas.

I. Respondent Profile The survey captured a diverse cross-section of Black-owned businesses operating across Connecticut. Respondents represented multiple industries, revenue levels, and stages of business maturity, offering a broad view of the current Black entrepreneurial landscape in the state.

1. Demographics Survey participants overwhelmingly identified as Black or African American, with a majority identifying as women.

This mirrors national trends in entrepreneurship, where Black women are the fastest-growing group of business owners in the United States. Despite this growth, Black women continue to receive less than one percent of all venture capital investment and face some of the most significant barriers to accessing capital—underscoring the disconnect between entrepreneurial activity and equitable financial support.

2. Business Age & Stage The sample included: • New businesses in their first three years of operation • Mid-stage companies focused on stabilizing operations and revenue • More mature firms generating consistent income and seeking growth opportunities A strong proportion of respondents identified as microbusinesses, a designation commonly used to describe enterprises with fewer than 10 employees and limited operating capital.

Nationally, approximately 95% of Black-owned businesses fall into this category, reflecting broader structural barriers related to startup capital, access to credit, and early-stage support.

It is important to distinguish between microbusinesses and small businesses, as these terms are often used interchangeably despite representing materially different levels of capacity and need. While small businesses are typically defined as having 10–50 employees, more formalized infrastructure, and greater access to financing, microbusinesses tend to operate with: 16

• • • •

Minimal staff (often the owner alone or with one to two employees) Limited cash reserves Informal or evolving administrative systems Heavy reliance on personal labor and self-funding

For many Black entrepreneurs, operating as a microbusiness is not a lack of ambition, but a reflection of constrained access to capital and growth pathways. This distinction matters because microbusinesses require different forms of support—including flexible capital products, administrative assistance, and readinessbuilding tools—than those designed for larger small businesses.

Understanding this difference is critical to designing effective ecosystem interventions. Programs, funding models, and policies that assume “small business” capacity often fail to meet microbusiness owners where they are, unintentionally reinforcing the very barriers they aim to remove.

MICROBUSINESS VS. SMALL BUSINESS WHY THE DIFFERENCE MATTERS Microbusinesses and small businesses are often grouped together, but they operate under very different conditions and constraints.

• Microbusinesses typically: • Employ fewer than 10 people (often only the owner) • Operate with limited startup and operating capital • Rely heavily on self-funding or personal income • Have evolving or informal administrative systems • Are deeply embedded in local communities and neighborhoods Small businesses typically: • Employ 10–50 people • Have more formalized systems for accounting, payroll, and compliance • Are more likely to access traditional lending products • Have greater capacity to pursue contracts, grants, and scale opportunities Nationally, approximately 95% of Black-owned businesses are microbusinesses, reflecting persistent inequities in access to capital, credit, and early-stage investment. This distinction is critical: programs, policies, and funding opportunities designed for small businesses often assume a level of capacity that microbusinesses simply do not yet have.

Failing to recognize this difference can unintentionally exclude Black entrepreneurs from support systems meant to help them grow. Designing equitable entrepreneurial ecosystems requires meeting microbusiness owners where they are, with flexible capital, readiness-building tools, and administrative support that acknowledges both their constraints and their potential.

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3. Industry Distribution Respondents represented a mix of: • Retail & e-commerce • Food services • Consulting and professional services • Health & wellness • Beauty and personal care • Creative industries • Construction & trades Additional industries from respondents that did not offer a meaningful sample but nonetheless represent Connecticut Black entrepreneurial diversity included: This reflects national data showing that Black entrepreneurs are highly represented in service and consumerfacing industries, often due to lower barriers to entry and limited startup capital. Nationally, these sectors— such as personal services, food, wellness, retail, and creative enterprises—require less upfront investment and fewer institutional gatekeepers, making them more accessible to entrepreneurs who are systematically excluded from traditional financing and startup infrastructure.

However, insights from The Lab at ConnCORP’s business owners’ meetings reveal that this concentration is not simply a matter of convenience or preference. Black business owners consistently report that their enterprises are intentionally built to meet unmet needs within their own communities— needs that exist precisely because of long-standing disinvestment, lack of local services, and limited access to culturally responsive resources. These businesses are often created to fill gaps: providing goods, services, care, and connection where none previously existed.

As one theme surfaced through The Lab’s engagement, Black entrepreneurs are not only business owners—they are community problem-solvers. Their ventures are frequently driven by a dual commitment: economic survival and community uplift. This results in businesses that are deeply rooted in place, relationshipdriven, and oriented toward strengthening local ecosystems and expanding shared resources.

Importantly, entrepreneurs affiliated with The Lab—despite having access to structured programming, mentorship, and ecosystem support—continue to report significant barriers to launching and sustaining their businesses. These include challenges related to capital access, administrative capacity, time constraints, and the difficulty of scaling beyond early-stage operations. This underscores a critical finding of this report: participation in support programs alone is not sufficient to overcome structural barriers embedded in the broader entrepreneurial ecosystem.

Taken together, the data suggests that Black entrepreneurs’ overrepresentation in consumer-facing industries should not be interpreted as a limitation of ambition or innovation. Rather, it reflects a strategic and values-driven response to systemic inequities—where entrepreneurs build what their communities need most, even when doing so requires navigating an ecosystem that was not designed with their success in mind.

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II. Business Operations and Structure 1. Most respondents operate as single-member LLCs or sole proprietorships.

Most respondents operate as single-member LLCs or sole proprietorships, a structure that offers flexibility, speed to launch, and lower upfront costs. For many Black entrepreneurs, these models are the most accessible entry points into business ownership—particularly in the absence of startup capital, legal counsel, or accounting support.

However, while these structures reduce barriers to entry, they also create downstream limitations. Sole proprietorships and single-member LLCs are often excluded from certain lending products, public contracts, and growth-oriented funding opportunities. Nationally, Black-owned businesses are nearly twice as likely to operate as sole proprietorships compared to white-owned firms—a disparity driven not by lack of ambition, but by systemic constraints in access to capital, legal services, and early-stage business formation support.

This structural reality means that many Black entrepreneurs are required to operate within business models that prioritize survival and flexibility over scale, often delaying formalization pathways that unlock institutional capital and contracting opportunities.

2. Recordkeeping, bookkeeping, and business planning support are inconsistent.

While respondents expressed strong confidence in their ability to operate their businesses day-to-day, many reported inconsistent access to—or confidence in—administrative readiness supports. Key areas of concern included: • Cash flow planning • Tax preparation and compliance • Grant and funding application processes • Financial forecasting and projections Entrepreneurs described feeling capable of delivering their product or service, yet overwhelmed by the administrative demands required to stabilize and grow their businesses. This gap between operational competence and administrative readiness is not a reflection of skill deficiency, but rather a consequence of under-resourced support systems and fragmented technical assistance.

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Nationally, Black entrepreneurs report spending disproportionate time managing administrative tasks themselves—often without professional support—leading to burnout, inefficiency, and missed opportunities.

Without consistent access to bookkeeping, financial planning, and strategic advisory services, entrepreneurs struggle to translate information into action, even when resources are available.

3. Most respondents reported heavy reliance on personal funds to launch and sustain their businesses.

This includes: • Personal savings • Credit cards • Loans from family and friends This pattern aligns with national research showing that Black entrepreneurs are: • Less likely to receive bank loans • More likely to self-fund or bootstrap • More likely to rely on informal financing networks—even when those resources are limited While personal investment reflects commitment and resilience, it also increases financial vulnerability.

Entrepreneurs who self-fund face higher personal risk, slower growth trajectories, and reduced capacity to absorb shocks. The lack of external capital further constrains hiring, marketing, inventory expansion, and long-term planning—reinforcing cycles of small scale and instability.

Taken together, these findings highlight a structural challenge: Black entrepreneurs are expected to operate sophisticated businesses without the institutional support typically required to do so. Addressing this imbalance requires ecosystem-level interventions that align legal formation, administrative capacity, and capital access into a coherent, equitable growth pathway.

POLICY NOTE: WHY ONE-SIZE-FITS-ALL BUSINESS SUPPORT FALLS SHORT Many public and private funding programs are designed with “small businesses” in mind—often assuming formalized operations, existing credit relationships, and administrative capacity. However, the majority of Black-owned businesses operate as microbusinesses, frequently as sole proprietors or single-member LLCs. As a result: • • •

Loan thresholds exceed realistic borrowing capacity Contracting requirements exclude businesses without prior institutional experience Grant applications demand administrative infrastructure that microbusinesses lack

Without intentional differentiation, these systems inadvertently reinforce inequities by rewarding businesses that already have access to capital, professional services, and time. Equitable economic development requires microbusiness-specific policies, flexible capital products, and readiness-building supports that acknowledge the realities of how Black entrepreneurs are starting and sustaining businesses today.

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III. Access to Capital Access to capital emerged as the most persistent and urgent barrier facing Black-owned businesses in Connecticut—mirroring patterns seen nationally, but shaped by local ecosystem dynamics. Across business stages, industries, and revenue levels, respondents identified capital access not as a single obstacle, but as a layered system of distrust, exclusion, and misalignment between entrepreneurs and financial institutions.

1. Low Confidence in Financial Institutions Respondents consistently reported low confidence in banks, lenders, and traditional financial institutions. This lack of confidence is rooted in both personal experience and collective memory. Entrepreneurs cited: • Fear of loan rejection • Discouragement following past discriminatory or dismissive interactions • A belief that banks and lending systems “aren’t built for businesses like mine” • Difficulty navigating complex and opaque documentation requirements Beyond rejection itself, many entrepreneurs described the anticipation of rejection as a barrier—one that discourages them from applying at all. This anticipatory exclusion creates a self-reinforcing cycle: entrepreneurs opt out of formal lending systems because the process feels inaccessible, risky, or emotionally taxing.

Many respondents expressed uncertainty about: • Which lenders or institutions could be trusted • Which products were realistically available to them • Whether their businesses were “ready enough” to apply These uncertainties are not simply informational gaps; they reflect a broader breakdown in relationship-based banking and transparent communication between financial institutions and Black entrepreneurs.

2. Significant Gaps in Loan Readiness While many respondents expressed a strong desire to access capital, they also reported feeling underprepared to meet traditional lending criteria. Common concerns included: • Uncertainty around business credit and credit-building pathways • Difficulty presenting financial statements in ways lenders expect • Limited understanding of underwriting requirements • Inconsistent access to bookkeeping, accounting, and financial advising 21

This finding aligns with national research describing Black entrepreneurs as “capital-deserving but not capital-ready.” Importantly, this readiness gap is not an individual failure—it is the result of systemic inequities in wealth accumulation, financial education, mentorship, and early exposure to institutional finance.

Without access to professional financial support and clear readiness pathways, entrepreneurs are often expected to meet standards that assume prior access to resources they have historically been denied. As a result, many businesses remain perpetually “almost ready,” unable to cross the threshold into formal capital systems.

3. Reliance on Grants Over Loans Survey respondents overwhelmingly expressed a preference for grants over loans.

This preference was driven by: • Fear of taking on debt without a financial safety net • Low trust in lending institutions • The perception that grants are more accessible or less punitive • Anxiety around repayment, especially in volatile or early-stage businesses While grants are highly competitive and limited in availability, they often feel safer and more attainable to entrepreneurs who lack generational wealth, collateral, or fallback options. Nationally, this “grant dependence” has emerged as a rational response to exclusion from traditional credit markets—not as a rejection of growth, but as a strategy for survival.

However, reliance on grants alone is insufficient to support long-term business scale. This dynamic highlights a critical ecosystem gap: the absence of trust-based, flexible, and appropriately sized lending pathways that meet Black entrepreneurs where they are while supporting sustainable growth.

Synthesis: Capital Access as a Systemic Barrier Taken together, these findings reveal that capital access challenges are not isolated issues of creditworthiness or business viability. They are the product of: • Historical and ongoing discrimination • Fragmented financial education and readiness support • Misaligned lending products • Lack of relationship-based banking • Risk frameworks that disadvantage microbusinesses For Connecticut’s Black entrepreneurial ecosystem to thrive, capital systems must be redesigned to prioritize trust, transparency, and flexibility—recognizing that access to capital is not just a financial issue, but a structural equity issue.

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IV. Municipal Support & Public Sector Navigation Across the dataset, entrepreneurs expressed a sense that municipal support systems are inconsistent, uncoordinated, or difficult to navigate.

1. Permitting, licensing, and regulatory processes are seen as barriers.

Respondents described: • Unclear instructions • Confusing or slow approval timelines • Limited communication from local officials • Lack of awareness about whom to contact This creates burdens for new and growing businesses, delaying launches and expansions.

2. Limited municipal outreach Many entrepreneurs have never been contacted by or engaged by their town’s economic development office.

This contributes to: • Missed funding opportunities • Limited access to procurement pipelines • Low awareness of business-friendly initiatives 3. Supplier diversity gaps Business owners note that municipalities lack: • Clear supplier diversity programs • Inclusive contracting opportunities • Proactive engagement with Black-owned vendors Similar patterns appear nationally, where disparities in public procurement significantly affect Black business scale.

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V. Entrepreneurial Support Organizations (ESOs) Connecticut has numerous ESOs—yet entrepreneurs report difficulty knowing: • Where to begin • Who does what • How programs differ Which services fit their stage of business 1. Entrepreneurs feel overwhelmed by information.

Respondents said: • “There’s too much information and not enough guidance.”

• “I don’t know how to apply the advice I receive.”

• “Most programs repeat the same topics.”

2. Fragmented ecosystem Entrepreneurs want: • Coordinated programming • Clear pathways from startup to scale • Guidance on readiness • Support that feels culturally informed and accessible 3. Networking challenges While networking is highly valued, respondents report: • Cost barriers • Events that feel exclusive • Overlapping efforts across organizations Nationally, this reflects a broader call for ecosystems to consolidate, collaborate, and reduce duplication.

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VI. Entrepreneur Needs: What Business Owners Say They Want

Survey responses reveal several core needs across the ecosystem: 1. Access to capital, specifically: • Microloans • Flexible credit • Grants • Emergency funds • Better banking relationships

4. Networking & collaboration: Business owners want intentional spaces where they can: • Build relationships • Access new markets • Partner with peers • Learn from experienced entrepreneurs

2. Business readiness tools: Entrepreneurs want: • Templates • Checklists • Step-by-step guidance • Business planning support • Financial literacy training

5. Clear, accessible information They also want: • Better communication from ESOs • Municipal transparency • A central hub of resources • Easy navigation

3. Mentorship and coaching Respondents desire: • Consistent mentorship • Industry-specific coaching • Leadership development • Accountability partners

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VII. Comparison to National Trends Connecticut in National Context The experiences of Black entrepreneurs in Connecticut closely mirror national patterns in Black entrepreneurship. While local conditions and resources vary, the challenges identified through the 2025 State Black Business Survey reflect systemic dynamics that persist across the United States. Understanding these national patterns helps contextualize Connecticut’s findings and underscores the need for both local and structural solutions.

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National Pattern 1: High Entrepreneurial Activity, Low Capitalization Black Americans start businesses at higher rates than many other demographic groups, yet receive disproportionately low levels of investment and financing. This gap between entrepreneurial activity and capitalization limits early growth and long-term scalability.

Survey responses from Connecticut reflect this national trend, with many entrepreneurs reporting difficulty accessing startup and growth capital despite strong demand for their products and services.

National Pattern 2: Microbusiness Dominance Nationally, the vast majority of Black-owned businesses operate as microbusinesses with fewer than ten employees. Connecticut respondents reflect this same pattern, with most businesses running lean operations and limited staffing capacity. While this structure enables flexibility and faster entry into business ownership, it also constrains access to capital, contracting opportunities, and growthoriented resources.

National Pattern 3: Limited Trust in Financial Institutions Research consistently shows that historical and ongoing discrimination within financial systems has eroded trust among Black entrepreneurs. These experiences contribute to both real and perceived barriers to accessing capital. In Connecticut, survey respondents echoed this national reality, citing fear of rejection, lack of transparency, and prior negative interactions as reasons for disengagement from traditional lending institutions.

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National Pattern 4: Fragmented Entrepreneurial Ecosystems Across the country, Black entrepreneurs report difficulty navigating entrepreneurial ecosystems that are fragmented, duplicative, and poorly coordinated. Connecticut is no exception. While the state has a wide range of support organizations and programs, business owners often experience them as disconnected and difficult to navigate, leading to underutilization of available resources.

National Pattern 5: Reliance on Personal Funding Due to limited access to institutional credit and fewer personal or generational wealth reserves, Black entrepreneurs nationwide frequently rely on personal savings, credit cards, and informal networks to fund their businesses. Connecticut respondents reflected this same reliance on self-funding, a strategy that often delays growth and increases personal financial risk.

VIII. Key Insights From the survey findings, focus group discussions, and stakeholder engagement, several overarching insights emerge: 1. The ecosystem is strong in assets, but weak in navigation.

Connecticut has a wide range of entrepreneurial resources, institutions, and programs designed to support small businesses. However, many entrepreneurs struggle to access these assets with confidence. The challenge is not the absence of resources, but the lack of clear, coordinated pathways that help business owners understand where to begin, what applies to their stage of growth, and how to move forward strategically.

2. Structural inequities—not entrepreneurial capacity—drive most challenges.

The barriers described by business owners are systemic in nature. Lending inequities, municipal inefficiencies, fragmented support systems, and misaligned institutional requirements create obstacles that persist regardless of entrepreneurial skill, effort, or ambition. These findings reinforce that the challenges facing Black-owned businesses are rooted in structures—not individual shortcomings.

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3. Readiness tools represent a critical opportunity for growth.

Entrepreneurs consistently expressed a desire for guidance that is practical, simple, and personalized. Clear readiness tools—such as assessments, checklists, and stage-based pathways—could help business owners better position themselves for capital access, contracting opportunities, and sustainable growth .

4. Cross-sector collaboration is essential to ecosystem change.

No single organization or stakeholder group can address the challenges identified in this report on its own.

Meaningful progress will require coordination across entrepreneurial support organizations, financial institutions, municipalities, educational partners, and philanthropy. A shared framework and aligned strategies are necessary to reduce fragmentation and increase impact.

5. Entrepreneurs are seeking relational—not just transactional—support.

Beyond programs and funding, entrepreneurs are asking for relationships built on trust and consistency. They want: • Meaningful mentorship grounded in real business experience • Partnership-oriented engagement from banks and lenders • Clear and proactive communication from municipalities • Coordinated and intentional support from ESOs Taken together, these insights point toward a shift in how entrepreneurial ecosystems must operate—moving from isolated interventions toward integrated, relationship-driven systems that center the lived experiences of Black business owners.

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THEMES & RECOMMENDATIONS

The State of Black Business research included insights not only from entrepreneurs, but also from the institutions that shape the conditions under which businesses start, grow, and scale. Each stakeholder group plays a distinct role in Connecticut’s entrepreneurial ecosystem— and each has specific opportunities to address the gaps identified through this research. The following recommendations are designed to encourage coordinated, cross-sector action that aligns institutional capacity with the lived experiences of Black entrepreneurs.

I. Entrepreneurial Support Organizations (ESOs), Small Business Associations, Chambers of Commerce & Networking Groups Key Themes Identified • Entrepreneurs struggle to digest and apply the overwhelming volume of business information available.

• Support systems often feel fragmented, duplicative, and unclear.

• Business owners desire centralized guidance and more coordinated programming.

• Networking is valued, but often financially or logistically inaccessible.

• Confidence in knowing where and how to begin is low.

Recommendations 1. Develop a statewide ESO Resource Hub. Create a centralized platform that consolidates entrepreneurial resources and reduces fragmentation. The hub should include: • Funding opportunities • Training and program calendars • Technical assistance and advisory services • Clear navigation pathways by business stage The Community Foundation for Greater New Haven’s E3 Connector represents a promising foundation on which to build.

2. Create a “Business Readiness Rubric” or Cheat Sheet.

Develop a practical, culturally grounded tool to help entrepreneurs assess: • Structural readiness • Administrative preparedness • Funding and capital viability This recommendation emerged directly from community calls to “bring back Black Wall Street”—reflecting a desire for clear, valuesaligned pathways to sustainability and growth.

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3. Convene joint ESO information sessions on a quarterly basis. Co-hosted by: • ESOs • Local and state officials • Industry leaders These sessions can demystify public resources, reduce program redundancy, and provide consistent touchpoints for entrepreneurs navigating the ecosystem.

4. Establish Black Business Councils or DEI Councils within Chambers of Commerce.

Modeled after efforts such as the Greater New Haven Chamber’s D&I Council, these bodies can elevate Black entrepreneur voices, shape inclusive programming, and strengthen accountability within chambers.

5. Provide discounted or free access to networking events for small businesses.

Cost should not be a barrier to relationship-building, peer learning, or ecosystem participation.

6. Coordinate intentional, themed networking events across organizations.

Rather than overlapping efforts, organizations can: • Host joint events • Align around complementary themes • Rotate venues across municipalities This approach reduces oversaturation, maximizes attendance, and strengthens community cohesion.

II. Community Development Financial Institutions (CDFIs) & Financial Institutions

Key Themes Identified • • • • •

Entrepreneurs report low confidence in their ability to access capital.

Many do not trust banks or believe loan products are designed for them.

Documentation and underwriting requirements feel intimidating.

Business owners desire deeper, more personalized banking relationships.

Existing loan products often fail to meet the realities of microbusinesses.

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Recommendations 1. Introduce microloan and flexible credit products with lower documentation thresholds. Products should be designed for: • Early-stage entrepreneurs • Low-credit or credit-building applicants • Microbusinesses seeking under $25,000 2. Host monthly or quarterly “funding clinics” in partnership with ESOs. These clinics should: • Clearly explain available financial products • Support application preparation • Normalize engagement with financial institutions • Build trust through transparency and consistency 3. Co-design financial readiness cohorts. Focus areas should include: • Bookkeeping and financial management fundamentals • Grant writing and compliance • Business credit building • Clear capital access pathways 4. Assign relationship managers to underserved entrepreneurs.Relationship-based banking remains one of the strongest predictors of small business lending success. Financial institutions should: • Pair entrepreneurs with consistent points of contact • Offer office hours within ESOs or community-based spaces 5. Partner with municipalities on credit-building initiatives. Municipal-backed programs can help entrepreneurs: • Establish formal banking relationships • Build credit histories • Prepare for future capital access

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III. Local Economic Development Offices Key Themes Identified • Municipal support is perceived as weak or inconsistent.

• Permitting and licensing processes are slow and difficult to navigate.

• Supplier diversity and public contracting opportunities are limited.

• Entrepreneurs lack awareness of municipal programs and points of contact.

Recommendations 1. Establish a Small Business Liaison within each municipality.This role should: • Serve as a direct point of contact for entrepreneurs • Provide navigation across municipal systems • Offer permitting and licensing guidance • Conduct proactive outreach to local businesses 2. Streamline permitting and licensing through equity-focused systems.

Options include: • Fast-track processes for minority-owned businesses • Clear step-by-step guides • Online status tracking • Templates and standardized checklists 3. Mandate supplier diversity programs. Municipalities should: • Expand contracting opportunities for Black-owned businesses • Maintain up-to-date vendor directories • Partner with ESOs to identify qualified vendors 4. Sponsor regular municipal information sessions. These sessions can: • Educate entrepreneurs about local incentives • Clarify regulatory and compliance requirements • Increase transparency and trust 5. Introduce targeted tax incentives for small businesses under $500,000 in revenue. Such incentives can encourage: • Hiring • Business growth • Local reinvestment

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IV. Universities & Educational Partners Key Themes Identified • Entrepreneurs seek mentorship and technical training.

• University resources often feel disconnected from real-world small business needs.

• Students are interested in entrepreneurship, but pipelines are limited.

• Opportunities exist to bridge theory with application.

Recommendations 1. Expand university-based Entrepreneurship Clinics.

Supervised graduate students in: • Marketing • Accounting • Law …can provide hands-on support to small businesses while gaining applied experience.

2. Create paid internship pipelines pairing students with small businesses. These programs strengthen: • Workforce development • Business capacity • Student career readiness 3. Integrate entrepreneurship into K–12 and higher education curricula. This should include: • Entrepreneurial mindset development • Business fundamentals • Financial literacy education 4. Open university resources to community entrepreneurs. Including: • Coworking spaces • Prototyping and innovation labs • Media and production studios Expanding access strengthens community ties and builds more inclusive innovation ecosystems

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V. Philanthropy & Nonprofit Sector

Key Themes Identified • Entrepreneurs feel disconnected from philanthropic institutions.

• Many are unaware of available grant or support opportunities.

• Grassroots ESOs face chronic capacity and sustainability challenges.

Recommendations 1. Fund outreach and awareness campaigns focused on small business resources.

Philanthropic partners can support: • Public awareness initiatives • Resource marketing • Targeted community engagement 2. Provide multi-year operational grants to grassroots ESOs. Sustained funding enables organizations to: • Build staff capacity • Stabilize operations • Deliver consistent programmingw • Reduce burnout among small teams 3. Sponsor capacity-building fellowships for small business leaders.

Fellowships can strengthen: • Leadership development • Business operations • Strategic planning • Community influence

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CONCLUSION

The 2025 State of Black Business Report reveals a clear truth: Connecticut’s Black entrepreneurial ecosystem is rich in talent, ambition, and community strength—yet it remains constrained by structural barriers that must be confronted with intention and collaboration.

Black entrepreneurs are not asking for handouts. They are asking for systems that work. Specifically, they are calling for: • • • • •

Clear and consistent guidance Trustworthy, accessible pathways to capital Transparent and navigable municipal systems Meaningful mentorship rooted in real experience Coordinated, relationship-driven support

The good news is that Connecticut already has much of what it needs to respond. The state is home to strong institutions, committed leaders, and a deep network of community-based organizations capable of building a nationally recognized model for equitable economic development.

What is required now is action.

Entrepreneurial support organizations must work together rather than in isolation. Financial institutions must rebuild trust and humanize capital access. Municipalities must streamline systems, improve communication, and embrace supplier diversity. Universities must open their resources and expertise to the communities they serve. Philanthropy must move beyond short-term project funding and invest in sustained, operational capacity across the ecosystem.

This report is an invitation—to policymakers, funders, institutions, and partners across sectors—to act with urgency and alignment. Ensuring that Black entrepreneurs in Connecticut can not only launch businesses, but grow, scale, hire, and build wealth is both an economic imperative and a moral one.

The path forward is collaborative.

The moment is urgent.

And the opportunity is profound.

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REFERENCES

1. Association for Enterprise Opportunity. The State of Black Entrepreneurship in America. Association for Enterprise Opportunity, n.d.

2. Brookings Institution. Black Business Ownership and Economic Equity in the United States.

Brookings Institution, n.d.

3. ConnCORP. Prior Publications, Community Reports, and Internal Research. ConnCORP, n.d.

4. Federal Reserve System. Small Business Credit Survey: Report on Employer Firms. Federal Reserve Banks, n.d.

5. McKinsey & Company. The Economic State of Black America. McKinsey Global Institute, n.d.

6. National Bureau of Economic Research. Research on Entrepreneurship, Race, and Economic Mobility. National Bureau of Economic Research, n.d.

7. U.S. Census Bureau. Annual Business Survey (ABS). U.S. Department of Commerce, n.d 8. U.S. Small Business Administration, Office of Advocacy. Frequently Requested Statistics on Small Business. U.S. Small Business Administration, n.d.

9. Connecticut Department of Economic and Community Development. Small Business Development Programs and Economic Reports. State of Connecticut, n.d.

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