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Executive Summary

COVID-19 has had a devastating impact on small businesses, with potentially lasting effects. Small businesses need support in the months ahead, but more intentional, equitable recovery strategies are especially required. This is because, like so many other aspects of the pandemic, the burden on small businesses fell disproportionately on people of color. In its first months, the number of active Black-owned businesses fell by 41%, and the number of Latinx-owned businesses fell by 32%, or approximately 1.5 to 2 times the overall closure rate. Given these realities, many local governments are eager to promote a more equitable recovery among small businesses. And especially with federal funds now being channeled to states and localities, they have an opportunity to both promote economic recovery and close longstanding wealth gaps.

But government cannot act alone to support an equitable recovery, because recovery is driven by factors beyond its direct control. Entrepreneurs need access to capital, affordable real estate, and customers.

They also need skilled workers, who themselves require access to training and employment networks that lead to better jobs within small businesses. Addressing this breadth of needs requires recovery strategies that engage many sectors, including banking, community development financial institutions (CDFIs), commercial real estate, business-supporting nonprofits, and workforce development agencies. Local government, therefore, may need to play a convening role in an all-hands approach, working with citywide, regional, and community partners to ensure efforts are aligned.

In this spirit, LISC partnered with Next City to develop a playbook for equitable small business recovery that is tailored to government audiences in different kinds of economic and regional contexts both urban and rural. Drawing on original research and diverse cohorts of public officials and practitioners, all of the playbook’s strategies are supported by a series of five mutually reinforcing principles that we call “equitable pathways to recovery.”

The five equitable pathways to recovery are:

1 Being intentional defining focal small businesses and their needs

2 Being inclusive in strategy development and implementation

3 Ensuring program accessibility by addressing barriers to access

4 Leveling the playing field by accounting for capacity needs in deployment

5 Setting up a monitoring process with accountability mechanisms

Using this framework, the playbook describes actions that can be taken around three topics critical to small business success: (1) accessing capital, (2) accessing workers and providing quality jobs, and (3) securing affordable commercial space. A concluding section presents actions relevant to the federal government, and describes innovative uses of federal resources to promote an equitable recovery.

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Access to Capital

Access to capital is fundamental for businesses at any stage of its growth, but women and entrepreneurs of color are more likely to be denied loans, offered less financing than requested, and charged higher interest rates than white- and men-owned firms. Local governments can play many roles in ensuring capital is available and accessible to women-owned small businesses and to entrepreneurs of color. Cohort participants focused on ways that government can act as a lender, encourage private investment by providing loan guarantees, and provide business opportunities to women and entrepreneurs of color through prioritized procurement strategies.


Building Small Business Capacity for Growth and Quality Jobs

Small businesses vary in the wages they pay, and in the education and skills they require; unfortunately, due to economic constraints owners face, many jobs are neither accessible nor able to pay living wages. Our research and the experiences of cohort members identified strategies to simultaneously strengthen small businesses and connect them to local skills and employment systems.


Promoting Affordable Commercial Space

Many small businesses that managed to remain open through the pandemic are struggling to pay rent. The Federal Reserve found that 43% of small employer firms experienced challenges paying rent in 2020, with BIPOC-owned firms more likely to report difficulties than white-owned firms. Local governments can advance transformative policies that fight commercial displacement, preserve existing spaces, and develop new affordable spaces and community ownership opportunities for BIPOC-owned small businesses.

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Federal Policy Challenges and Opportunities

To foster an equitable recovery, communities need inclusive policies at both the local and federal levels. The historic investments and substantial flexibility afforded to local governments by the CARES Act and the American Rescue Plan Act (ARPA) offer a potentially once-in-a-generation opportunity to transform local business and workforce ecosystems in equitable directions. As programs supported by these investments are implemented, it is important to address longstanding obstacles within federal policies and programs to ensure local governments and their community-based partners can use them inclusively, and that community-based partners are integrated within programs to offer alternative financing and technical assistance that is affordable, culturally relevant, and linguistically accessible.


Patricia Voltolini Senior Research Associate

Julia Duranti-Martínez Program Officer for Capacity and Research

Melissa Kim Senior Program Officer for Capacity Building

Michelle Harati Senior Policy Officer, LISC Policy

David M. Greenberg Vice President, Knowledge Management and Strategy


The authors are grateful for the insights provided by cohort participants and interviewees, representing diverse sectors, varied local and regional perspectives, and with expertise in multiple policy topics. The playbook strives to represent their powerful work, commitments, and experiences. We thank:

Andrew Delmonte, Director, Cooperation Buffalo; Caleena Shirley, Regional Director, BBIF; Chanell Scott Contreras, Executive Director, ProsperUs Detroit; Clarinda Landeros, Director of Public Policy, National Association for Latino Community Asset Builders; Dafina Williams, Senior Vice President, Public Policy, Opportunity Finance Network; Daniel Fitzgerald, Associate Director, San Diego & Imperial Small Business Development Center Network; Daniel R. Sanchez, Mayor, City of Fremont, Ohio; Deyanira Del Rio, Co-Director, New Economy Project; Edward Ubiera, Assistant Commissioner, Business Programs, New York City Department of Small Business Services; Elissa Sangalli, President, Northern Initiatives; Emily Edison, Executive Director, SOAR Career Solutions; Erica Bouris, Director of Economic Development, International Rescue Committee; Essence Sweat, Business Development Specialist, University District Community Development Association; Floyd Miller, President & CEO, Metropolitan Business League; Immanuel Ivey, Senior Director of Workforce Development and Entrepreneurship, Edna Martin Christian Center; Isabel Velez Diez, Director of Operations & Strategy, Allies for Community Business; Jacqueline Rodriguez, Assistant Chief Grants Administrator, Economic and Workforce Development Department, City of Los Angeles; Jackson Brossy, Native CDFI Network; James Bason, President/CEO, TruFund Financial Services; James Johnson-Piett, Principal and CEO, Urbane Development; Jamon Phenix, Public Policy Associate, Opportunity Finance Network; Janet Kennedy, CEO, Healthy Alliances Matter, Riverfront Community Development; Jasmine Dixon, Director of Lending and Capital Access for Northeast Ohio, ECDI; Jocelynne Rainey, President and CEO, Getting Out and Staying Out; Kasra Movahedi, Director, IRC’s Center for Economic Opportunity; Keith Bisson, President, Coastal Enterprises, Inc.; Kerrie Carte, Planning & Development Coordinator, Great Lakes Community Action Partnership; Kyle Johnson, Co-founder & COO, Business Services Collective; Larry Williams, Executive Director, Indy Black Chamber; LeAnn Littlewolf, Senior Program Office, Northland Foundation; Lonnie Saboor, Director of Small Business Development, INVEST Atlanta; Nancy Johnson, President, Greater Atlanta Urban League; Natalia Urtubey, Director of Small Business, Office of Economic Development, City of Boston; Navjeet Singh, Workforce Development Consultant; Olivia Holden, Executive Director, Assets Toledo;

Pat Foster, Director, Office of Minority Business Development, City of Richmond; Quenia Abreu, President, New York Women's Chamber of Commerce; Rawan Elhalaby, Senior Economic Equity Program Manager, Greenlining Institute; Rebecca Rowe, Associate Director, Community Revitalization Office, Virginia Department of Housing and Community Development; Render Thomas, Project Manager for Federal Incentives, Department of Metropolitan Development, City of Indianapolis; Ron Fong, Executive Director, Asian Pacific Islander Small Business Program; Segun Idowu, President & CEO, Black Economic Council of Massachusetts; Shamika Wright, Executive Director, Jax Chamber Foundation, and Director of Community Outreach, Jax Chamber; Shonterria Charleston, Director, Training and Technical Assistance, Housing Assistance Council; Sommer Mathis, on behalf of Next City; Steve Cordova, Executive Director, Total Concept, Inc.; Theresa Johnson, Executive Director, Beaver Street Enterprise Center; Thomas Hanna, Research Director, The Democracy Collaborative, and Vice President, National Center for Economic and Security Alternatives; and Yvonne Boye, Senior Director, Office of Neighborhood Economic Development, Commerce Department, City of Philadelphia.

Within LISC, we are grateful to colleagues who helped ground playbook insights in local realities, including Kim Cutcher and Sarah Allan in Toledo; Dale Royal in Atlanta; Jane Ferrara in Virginia; Miranda Rodriguez and Emma Kloppenburg in Los Angeles; Emily Scott and Natalia Rodriguez-Hilt in Indianapolis; Kristopher Smith in Jacksonville; Pamela Kramer and Lars Kuehnow in Duluth; Valerie White, Eva Alligood, and Ibrahima Souare in New York City; Karen Kelleher in Boston; Julie Barrett O’Neill and Tyra Johnson Hux in Buffalo; and Caitlin Cain and Nadia Villagrán at Rural LISC. We are thankful also to subject-area experts from LISC National: David Johnson provided important guidance from Lending, Katrin Sirje Kark from the National Family Income and Wealth-Building initiative, Nicole Barcliff from Policy, and Casey Harron and Astrid Lewis Reedy from Communications, who developed the design and online functionality for the playbook.

Finally, we are thankful for the partnership with Next City, who collaborated with LISC to provide a development edit for this playbook; to curate the webinar event that spotlights work done by the cohort; and to publish a series of articles under the title "Elements of an Equitable Recovery" that identified trends and success stories around post-COVID economic recovery for small businesses.