Black Atlanta entrepreneurs struggle to get loans, venture funds

African American business owners say they continue to struggle to find loans or venture capital support nearly four years after commitments were made to combat racial inequality after the murder of George Floyd
Ceata Lash, founder and owner of PuffCuff, poses for a photo in her office in Marietta. The company makes specialized clasps for people with curly hair. (Natrice Miller/

Ceata Lash, founder and owner of PuffCuff, poses for a photo in her office in Marietta. The company makes specialized clasps for people with curly hair. (Natrice Miller/

Ceata Lash is a proud inventor.

Ten years ago, she created a simple hair accessory, the PuffCuff, that manages to solve multiple problems for gathering up curly hair with just two pieces of plastic.

“It doesn’t cinch, it doesn’t bind, so there’s no headache and there’s no hair damage,” Lash, founder and CEO of the Marietta-based business, said.

But now she’s facing a problem she doesn’t know how to solve: how to raise enough funds to take her business to the next level — and she’s not alone.

Minority business owners face some factors that confront all businesses, like high interest rates and dramatic decreases in venture capital investment. But there are also increased legal attacks on federal and nonprofit programs for minority business owners.

Moreover, new banking regulations could limit lending from big banks.

Combined, these factors make for a particularly difficult funding landscape for entrepreneurs, and particularly Black and minority entrepreneurs, experts say.

Ceata Lash, founder and owner of PuffCuff, points to the different sizes of her product in her office in Marietta on Tuesday, Feb. 20, 2024. The company makes specialized clasps for people with curly hair. (Natrice Miller/

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It’s a striking change from less than four years ago, when the murder of George Floyd galvanized philanthropists, investors and corporations to pledge money to fight racial injustice. Since May 2020, the nation’s largest companies pledged about $340 billion to “racial equity,” according to an analysis by McKinsey.

John Hope Bryant, founder and CEO of the financial literacy nonprofit Operation HOPE, calls this time period the “Third Reconstruction” after the post-Civil War and Civil Rights eras. It’s a reference to the era immediately after the Civil War when new laws and efforts were put in place to try to help formerly enslaved people find their footing after Emancipation.

“The first Reconstruction stopped not because programs were not successful, not because the nation was not moving forward,” Bryant said. “It stopped because people felt fearful that Blacks were getting too much, too quickly.”

And he thinks the same thing is happening now. “Here we go again, in the third Reconstruction, after George Floyd’s murder, and some people are thinking Black people are getting too much too quick.”

Difficult funding landscape

Lash says she’s sold more than 760,000 PuffCuffs with revenue of more thant $7 million with since 2014 and has hundreds of thousands of followers on social media. Most of those sales have been made online, but Lash would like to expand her presence and sell more of her goods on the shelves of retailers.

She sells her invention on her own website and Facebook, as well as via Amazon, Walmart and Target. PuffCuff is also on the shelves of chains like H.E.B. and Sally Beauty Supply. But Lash said she needs working capital to hire people and develop new products to expand that retail presence.

“We are still making money,” she said. “… I have opportunities to go into retail, but I need money to make the inventory to go into retail.”

Ceata Lash, founder and owner of PuffCuff, and her son Leithen work in the company’s warehouse in Marietta on Tuesday, Feb. 20, 2024. The company makes specialized clasps for people with curly hair. (Natrice Miller/

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She said venture capital is not a viable option for her because investors don’t want to put money into consumer-packaged goods businesses. And venture capital is down across the board, particularly for Black founders.

In the Atlanta area, Black-owned firms raised a record-high $467 million in 2021, which dropped to about $110 million a year later and only $23 million last year, according to Crunchbase. That 79% decline from 2022 to 2023 is twice that of the general overall decline in VC funding.

And the taps aren’t flowing for Black business owners from more traditional funding sources, either.

In metro Atlanta, nearly 9% of all employer firms, meaning ones that have employees, not just sole proprietorships, are Black-owned. These job creating companies span the spectrum, including financial consulting firms like Atlanta-based Praxis Strategic Solutions, occupational therapy practice Achieve Vision Center in Marietta and oil wholesaler KRG Oil Co. in Marietta.

But when it comes to the loans needed for expansion, the environment is tough for everyone, but not equally so, said Joe Wall, a Goldman Sachs managing director who works with the firm’s 10,000 Small Businesses initiative.

A national survey showed that of small businesses applying for loans, regardless of race, just 41% received the amount they asked for, Wall said. “Among Black small business owners, it was only 26%.”

According the Federal Deposit Insurance Corp., the law prohibits discrimination in lending on the basis of race, color, religion, sex, marital status and age.

Last year, the Small Business Administration (SBA) lent more than $27.5 billion in its primary loans, known as 7(a) loans, to business owners. Just 4.6% of those loans went to Blacks, compared to 8.5% that went to Latinos, 19% to Asian-Americans and 42.3% to whites, according to an analysis by Bankrate, an online source for lending information.

Fewer than half of newly founded companies last five years, according to the SBA. So borrowed money can be crucial to powering the jump from start-up to sustained success.

Ceata Lash, founder and owner of PuffCuff, holds the different products she sells online and in stores at her warehouse in Marietta on Tuesday, Feb. 20, 2024. The company makes specialized clasps for people with curly hair. (Natrice Miller/

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For Monica McCoy, the Atlanta-based founder of diverse hiring consultancy Monica Motivates, being able to access more capital would mean a chance to grow, to hire, to try new approaches, without survival depending on current sales.

“It gives you room for error,” McCoy said.

But recent lawsuits and court rulings brought by conservative activists have added additional hurdles to local Black entrepreneurs accessing resources from federal programs that were set up to address the opportunity gaps they face in the traditional banking system.

Atlanta-based Fearless Fund was sued and accused by a conservative group of racial discrimination for a grant program for Black women entrepreneurs. Two federal small business programs, meanwhile, were hit with court rulings that barred the agencies from presuming certain racial and ethnic groups were socially disadvantaged. In the case of the Minority Business Development Agency, the lawsuit essentially forced it to open to white entrepreneurs.

These legal setbacks are part of what non-profit entrepreneur Bryant sees as an attack on initiatives for Black progress.

A chill on lending?

And the obstacles for borrowers could soon get higher.

The Federal Reserve is considering a revision in banking rules known as Basel III that raises capital requirements for big banks, compelling those lenders to hold more money proportional to loans, a move the Fed says would strengthen the banking system.

Adoption of the proposed rules would effectively cut the amount that banks lend out, according to Wall, the Goldman Sachs managing director. ”It would require them to hold on to about 20% more.”

For small businesses, but especially minority entrepreneurs, the impact could be painful, he said.

“So many of them already rely on second mortgages, self-financing, family and other bootstrapping,” Wall said. “Our concern is that if traditionally financial institutions are tightening, it will force small business to use non-traditional sources (with high interest) like fintech or payday lending.”

Lash, the PuffCuff inventor said she has been turned down by a several banks. Among her failed attempts to get a loan was a request to a large bank for $250,000, she said. “We were growing 75% year-over-year… . They still turned me down. They said, ‘We don’t think it’s a viable investment.’”

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