- Federal Reserve report finds that minority-owned businesses face greater challenges than White business owners in receiving financing during the COVID-19 pandemic
- Black and Hispanic business owners were half as likely as White business owners to be approved for non-emergency loans
- Minority business owners are also more likely to rely on personal sources for funds to offset revenue losses
Summary by Dirk Langeveld
Black and Hispanic business owners were half as likely as White business owners to be approved for non-emergency loans during the COVID-19 pandemic, according to a report by the Federal Reserve’s 12 regional banks.
The report found that this trend was observed even when minority business owners were rated as low credit risks. In fact, lower risk minority business owners were approved for loans at the same rate as medium or high risk White business owners.
Minority business owners were also more likely to rely on personal funds or other non-traditional sources to keep their company afloat. These included taking on a second job to earn more money or borrowing from friends or family.
