In class, we learned that for entrepreneurial small businesses, a lack of capital is usually the sole reason for failure. However, what are some of the reasons that small businesses may lack start-up capital? There’s the obvious fact that since these businesses are start-ups, they have very little repute with investors of any kind, let alone banks, and are highly unlikely to be backed by grayhairs, especially if the entrepreneurs in question are relatively young. But is it possible that (in the States at least), some small businesses suffer from a lack of capital because racism and sexism? The findings from a US-government led study shows that businesses owned by African-American females tend to be more poorly funded than most small businesses belonging to their white and/or male counterparts. It’s interesting that while every American politician, at least for the last half-century or so, has championed ethnic and gender minorities, not to mention small businesses, American banks still hold to the social views of olde. In a country where banks and government are practically one in the same, are all men truly created “equal?” Maybe in the eyes of “their Creator,” sure, but when it comes to applying for a bank loan? So help you God.
http://www.economist.com/whichmba/minority-entrepreneurs