Nationwide (BlackNews.com)—Minority business owners continue to face challenges when applying for loans from traditional banks and lenders, but entrepreneurs should consider alternative financing as a primary lending source. This is a much easier way to secure funds without facing race-based discrimination and/or application denials.
Research on minority business lending
A recent study conducted by researchers at Brigham Young University, Utah State University and Rutgers University revealed that treatment of minority business owners seeking small business loans varied greatly from that of White business owners. The researchers used nine “mystery shoppers”, three Black, three White and three Hispanic small business owners who wore the same professional clothes, had similar backgrounds and sought $60,000 loans for similar businesses.
While the participants presented similar credentials, the study found that Black and Hispanic business owners were given less information on lending terms, offered less application help and were asked more personal financing questions.