By Tihut Tamrat, Voice & Viewpoint Staff
Diversity, Equity, and Inclusion (DEI) initiatives have long played a pivotal role in fostering opportunities for minority-owned businesses. However, in February 2025 the Trump administration issued executive orders to terminate all federal programs related to DEI and directed federal contractors to stop promoting diversity. The potential consequences of such a shift could be profound, for various sectors, but particularly for small businesses and minority entrepreneurs.
“What’s interesting about the rise of entrepreneurship is it happened disproportionately in communities of color,” said Dilawar Syed, former deputy administrator of the Small Business Administration(SBA).
“These [DEI] programs make sure there’s access for capital through regional banks and community banks who actually bank with these communities. Unfortunately, with the [Administration] rolling back these programs, demands are unmet for services to build your business, to have in-language support, to have access to lenders in your communities that actually provide SBA loans. That is going to dry up,” he adds.
DEI policies help minority-owned businesses secure contracts with larger corporations through supplier diversity programs. Without them, economic disparities could widen.
“We recently saw that DOGE did 20% of layoffs at SBA. I’m a former tech entrepreneur turned public servant. I’ve been a turnaround CEO. Before you turn it on the company you go inside. You look under the hood to understand what’s going on. You talk to partners, you understand the needs and, of course, you streamline,” says Syed.
“But the approach to, without even stepping afoot in these agencies, laying off 20% of the workforce, many of them are folks who are providing customer service. Now you have longer wait times to get your question answered. And it affects not only entrepreneurs of color, it would affect every single American who wants to work with SBA to start and grow a business,” he adds.
If these initiatives are dismantled, minority business owners could find it even more challenging to compete in an already uneven financial landscape.
Elizabeth Barrutia, President and CEO of BARÚ, an independent women-owned agency, weighs in on how ending DEI disproportionately affects minority-owned businesses. “It’s challenging to navigate applying to be part of the SBA and be an approved women-owned small business (WOSB). There’s a lot of hurdles that you have to jump through. So the fact that they are closing down these local resources is going to make it even more difficult for entrepreneurs to become certified as an approved SBA vendor. And that SBA approval is really important when you’re trying to pitch federally approved contracts,” she says.
Barrutia continues, “For those of you who are not aware how the federal system works, they’ll put out a bid, which is called a request for proposal, and they offer set-asides for small businesses. And frankly, I’m very concerned that the services and programs for which we were bidding on are actually going to be eliminated now because they happened under the Department of Health and Human Services.”
The removal of DEI programs could undermine the value of diversity in business, making it harder for marginalized entrepreneurs to overcome existing barriers. This may stifle innovation and weaken market competitiveness by limiting diverse perspectives and solutions.
“Media landscapes are also going to be affected,” Barrutia adds. “My diverse suppliers like Ethnic Media Services, like broadcast and television stations or print outlets, or digital publishers, or even content creators will be affected.”
This could negatively impact the media. Because of a lack of diversity, everyone in the industry will start to sound the same and over time, this uniformity could pave the way for propaganda-driven narratives to dominate.
Dr. Esther Zeledón, Founder of Be. Act. Change., a non-profit organization, speaks on the loss of 95% of her contracts. “It’s devastating for me personally. Even beyond just ending DEI programs, it’s the slander and the stigma that’s being put around it,” she says “Like the executive order, the language was radical and wasteful. Using “radical” politicizes it, and puts a mistrust into the people who have benefitted from the programs and also to people who work in those spheres or represents it.”
While debates over DEI programs continue, it is crucial to recognize their impact on fostering economic inclusion and business growth in America today. Minority-owned businesses, already facing systemic challenges, stand to lose valuable opportunities if these initiatives are dismantled.
“I had all the merit, and I got in because of merit alone. What it [DEI initiatives] did, it just gave me the in, the knock. It leveled the playing field,” emphasizes Dr. Zeledón.
As discussions on the future of DEI unfold, policymakers, business leaders, and communities must weigh the potential consequences and work toward solutions that ensure all businesses have a fair chance to thrive.
