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New Report Shows That Minority Business are at a Disadvantage in Access to Lending

FEDERAL RESERVE BANK OF CLEVELAND
Credit FEDERAL RESERVE BANK OF CLEVELAND
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FEDERAL RESERVE BANK OF CLEVELAND

A new report finds that minority-owned businesses have a more difficult time getting credit from lenders than companies with white owners.

The report from the Federal Reserve Banks of Cleveland and Atlanta suggests that black business owners face the largest credit gap of minority groups in the study.

Black owners were twice as likely to report having difficulties getting funds for business expansion. They were also approved 20 percent less often for lines of credit than their white counterparts.

Brett Barkley is a research analyst with the Cleveland Fed. He says the findings don’t necessarily point to discriminatory lending, but he doesn’t rule that out.

"We see this as an important topic to ensure that discrimination is not happening, so we intend to further investigate why differences are showing up in the data. First, we are currently and plan to continue to share this report broadly across a variety of stakeholders," Barkley said.

The report used data from the 2016 Small Business Credit Survey.Loading...

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Lucas is a senior majoring in both economics and finance from Pittsburgh, Pennsylvania. Prior to this internship at WKSU, he interned at the Lake County Ohio Port and Economic Development Authority as a research intern. He currently serves as the opinion editor for The Kent Stater. Along the way, he’s also held several jobs within Kent State, from working as a tour guide to conducting research with professors in the economics department at the university.