New Survey Data Shows Black Small Business Owners Less Likely to Secure Loans
- Despite clear disparity, Black small business owners remain optimistic about economic prospects in 2024
NEW YORK, February 6, 2024 – In an effort to highlight the contributions of and the challenges faced by Black small business owners during Black History Month, Goldman Sachs 10,000 Small Businesses Voices today released new survey data showing Black small business owners face inordinate barriers to accessing capital, are less likely to secure loans, and often face predatory payment terms at higher rates. Despite this, Black small business owners report increased optimism and higher profit expectations for the year ahead.
“Black small business owners continue to disproportionately face challenges accessing affordable capital with fair terms, and on top of that, we’re often the target of predatory loans,” said Markevis Gideon, founder of NERDiT NOW in Wilmington, DE. “Closing these gaps and holding bad actors accountable must be a priority for lawmakers and regulators. Despite these unique challenges, Black small business owners continue to demonstrate incredible resilience and a sense of optimism about the future for our small businesses and our communities.”
Key findings from the survey include:
- Access to Capital: Black small business owners are disproportionately unable to get necessary capital for their businesses to grow. An astonishing 86% of Black small business owners surveyed were concerned about access to capital, higher than the overall percentage of 77% of small business owners.
- Loan Application Disparities: Black small business owners are more likely to have applied for new loans or lines of credit compared to the national average (44% vs. 35%). However, they are also less likely to receive the full amount they requested, with only 32% of those same small business owners receiving the requested funds compared to 40% nationally.
- Predatory Payment Terms: Alarmingly, 37% of Black small business owners who have taken loans in the last year report experiencing payment terms that felt predatory compared to 28% nationally.
- Optimism and Profit Expectations: Despite these challenges, Black small business owners express remarkable optimism, with 81% expressing positivity about their business prospects, compared to 75% nationally. Moreover, 75% of Black small business owners anticipate an increase in profits in 2024, surpassing the national average of 62%.
The nationwide survey of 1,459 small business owners was taken January 15-21, 2024. Respondents came from 49 U.S. States, Puerto Rico, and Washington, D.C. For more information on the survey, please visit: http://www.gs.com/glass-half-full.
###
About 10,000 Small Businesses Voices
Goldman Sachs 10,000 Small Businesses Voices, which in April marked its three-year anniversary, builds on Goldman Sachs 10,000 Small Businesses and organizes program participants to advocate for policies that matter to them. Learn more at www.gs.com/10ksb-voices
About Goldman Sachs 10,000 Small Businesses
Goldman Sachs 10,000 Small Businesses is an investment to help entrepreneurs create jobs and economic opportunity by providing a comprehensive business education program and access to capital and business support services. To date, 10,000 Small Businesses has served over 14,000 small businesses across the United States. The program has reached businesses from all 50 states, Puerto Rico, and Washington, D.C. Learn more at www.gs.com/10ksb.
About Goldman Sachs
The Goldman Sachs Group, Inc. is a leading global financial institution that delivers a broad range of financial services to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centers around the world.