del.icio.us
Digg
Sphere
Stumble
Technorati
Twitter
Start-Ups' Racial Inequality
By Marc Tracy
Presented without much further comment: a new study (h/t Fresh Inc.) finds that white-owned start-ups are substantially more likely to receive additional financing in their first, nascent two or three years than are those that are owned by blacks. Roughly 55% of such white-owned firms receive initial debt financing; only 47% of black-owned ones do. And the white-owned firms' typical financing is over $80,000, compared to under $30,000.
One key problem, of course, is that blacks simply are, on average, less wealthy than whites. But that does not completely explain the fact that it is the black-owned start-ups that actually tend to be more reliant upon owner equity, both at the start-up's outset and for its next few years. In fact, that statistic bears out the fact that black entrepreneurs tend to have a harder time securing credit than do white entrepreneurs.
It's starting to look as though changing the character of Small Business Administration Community Express loans, so that they're no longer specifically about helping minority and female small business owners, in order to increase lending generally might not the best idea.
Comments (1)March 3, 2009 4:12 PM
Comments (1)
It does not look good for society as a whole that acts of subtle institutional racism continues prowling around even behind the facade of respectability. I believe that *segregation* is widespread when offices are opened to cater to specific ethnic groups. The gov't really should open their eyes.
Posted by Gin | March 4, 2009 10:36 AM
Posted on March 4, 2009 10:36