Capital is a critical resource for accelerating ideas and keeping entrepreneurs on the path to changing the world. However, a recent study highlights significant discrimination in the land of plenty.
Conducted by business school professors at Utah State University, Brigham Young University and Rutgers University, the study featured nine businessmen—three white, three black, and three Hispanic. Similar in size and stature, donning the same outfits, and armed with similar education levels and financial profiles, they visited numerous banks seeking a roughly $60,000 loan to expand the very same business.
The Hispanic and black business owners were provided far less information about loan terms, offered less application help by loan officers, less frequently handed a business card, and asked more questions about their personal finances. (Washington Post)Despite the fact that Latinos make up the fastest growing entrepreneurial segment in the U.S., these barriers in financing prove as a stark reminder of the need to amplify awareness around the real challenges that exist for minority entrepreneurs.
In an arena where only 1-2% of VC money finds its way to African American and Latino entrepreneurs, there is still plenty of work to do and kudos to those who are raising the flag of awareness.