A new national survey shows small business owners, particularly entrepreneurs of color, lack confidence they can fund an unplanned $5,000 business expense or access basic financing to take advantage of growth opportunities. Business owners also lack awareness of financing options available to them; survey also points to high trust in the Small Business Administration, which could help provide solutions.
- 45% of respondents lack confidence to fund an unplanned $5,000 business expense.
○More AAPI, Black, and Latino/a entrepreneurs do not think they could fund an unexpected $5,000 than believe they could.
○Most respondents lack confidence that they could find funds for regular business expenses that lead to growth, such as a marketing campaign, a new hire, or to purchase property or equipment.
○Most entrepreneurs of color lack confidence they could finance a purchase order or contract or get a volume discount on an inventory purchase.
- 76% of Black, Latino/a, and White respondents report trust in the SBA, while 81% of AAPI respondents report trust in the SBA.
- Nearly half of respondents do not know about Community Development Financial Institutions (CDFIs) or Minority Depository Institutions (MDIs) and 41% of respondents are not familiar with FinTech lenders.
- 79% of respondents applied for a loan or other form of credit in the last 12 months. Of those who did, 83% were seeking less than $250,000 and 69% applied for less than $100,000.
“While the Covid-19 pandemic may be receding, it’s clear the economic impact it had on small businesses across the country has its own long tail,” said Tammy Halevy, Executive Director of Reimagine Main Street. “Small business owners continue to struggle with inflation, tight labor markets, and supply chain disruptions, and it’s crucial we equip Main Street entrepreneurs with the resources needed to build a more equitable small business economy. Now is the time to explore new solutions and co-investment from the private and public sectors.”
“Growth opportunities that require funding are too frequently deemed out of reach, particularly for entrepreneurs of color – which has a chilling effect on AAPI communities and economic growth,” said Chiling Tong, President and CEO, National Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship. “In order to rebuild from the economic fallout of Covid-19, we have to ensure entrepreneurs of color have the funding they need to grow and thrive.”
“This survey highlights a tremendous problem in our economy, which is that Black business owners are disproportionately unable to meet their financing needs,”
said Ron Busby, President and CEO, U.S. Black Chambers, Inc.
“If we want to reverse this trend and build a stronger and more prosperous small business economy, we have to address access to capital.”
said Ramiro A. Cavazos, President & CEO of the United States Hispanic Chamber of Commerce.
“Access to capital remains a stubborn problem for small business owners, especially small business owners of color, that will hamper our country’s success unless we do something about it,”
said Rhett Buttle, President of the Public Private Strategies Institute.
“Fortunately, this survey also points to opportunities for the private sector and our government to work together to help create solutions to help us grow a more equitable economy.”