Capital Is Scarce for Black Women
Black women entrepreneurs have more trouble getting capital than their counterparts in other ethnic groups, a study released today showed.
Only 38% of black women business owners had bank credit, compared with 60% of their white counterparts, 50% of Latinas, 45% of Asians and 42% of Native Americans.
The study, conducted by the National Foundation for Women Business Owners, also revealed that black women were the least likely to borrow capital to launch their firms, whether from banks, family, friends or other sources. Only 29% of black women borrowed for their start-ups, compared with 51% of Latinas, 49% of whites, 45% of Native Americans and 37% of Asians.
Not surprisingly, 73% of black respondents ranked access to capital as very important, compared with 61% or less for other ethnic groups.
Skip Cooper, executive director of the Black Business Assn. of Los Angeles, said black women entrepreneurs “have to deal with the burden of not only being female but being a minority. They become a double minority.”
Black businesswoman Stephanie Tyler said about 20 banks turned her down for loans before she turned to credit cards, her 401(k) plan and relatives for financing. Her business, Allstaff Temporary Services Inc., topped $1.5 million in sales in 1996.
“I had government clients. I had good credit, and I still couldn’t get a loan,” she said.