Black and Hispanic men seeking small business loans faced more scrutiny and worse treatment from bank officers than less qualified white men, according to a study released this week by the National Community Reinvestment Coalition.
The results, The Washington Post reports, demonstrate the challenges minority entrepreneurs face when trying to access additional capital to expand their businesses. The study also found declines in government-backed lending to black business owners, dropping from 8% to 3% of small-business loans between 2008 and 2016.
The organization sent teams of white, black and Hispanic “mystery shoppers” who acted as prospective borrowers to evaluate customer service interactions with the banks’ small business lending representative at 60 Los Angeles area banks. The testers had nearly identical business profiles and strong credit histories, with black and Hispanic testers possessing slightly better incomes, assets and credit scores than their white counterparts.
The findings are similar to local stories, like that of Baton Rouge contractor Tevin Wade, who says in a recent Business Report feature that he has faced challenges expanding his business.
Because of his experiences, Wade has publicly supported city-parish efforts to assist women-, minority- and veteran-owned small businesses with contracting opportunities.
Read the full story from the Washington Post here, and Wade’s here.
