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Access to Credit for Small and Minority-Owned Businesses

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  • Brent Meyer
  • Mark E. Schweitzer

Abstract

Equal access to small-business credit is a critical underpinning to equity in economic opportunity; however, it is difficult to regularly assess the fairness of credit provision. Prior research has focused on the Federal Reserve Board’s Survey of Small Business Finance, but the most recent data from this source is from 2003. This article provides preliminary results on new credit access questions added to the Census Bureau’s 2021 Annual Business Survey. We find that minority-owned businesses generally were just as likely to apply for credit in 2020, but Black-, Asian-, and Hispanic-owned businesses were less likely than white-owned businesses to report receiving all of the credit that they sought. Also, Black-, Asian-, and Hispanic-owned businesses more frequently reported seeking credit in order to cover operating expenses rather than for financing capital expenditures or expansion. Heading into 2022, minority-owned businesses report weaker ongoing viability.

Suggested Citation

  • Brent Meyer & Mark E. Schweitzer, 2022. "Access to Credit for Small and Minority-Owned Businesses," Economic Commentary, Federal Reserve Bank of Cleveland, vol. 2022(04), pages 1-6, March.
    • Handle: RePEc:fip:fedcec:93865
    DOI: 10.26509/frbc-ec-202204
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    Keywords

    diversity; small business;

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