Monday, the “NewsOne Now” panel discussed a recent Wall Street Journal report that found black-owned businesses receive just 1.7% of the $23.09 billion in total SBA loans. According to the WSJ:
Black entrepreneurs have largely missed out on a rebound in federal small-business lending since the financial crisis ended.
More than four years into the nation’s economic recovery, African-Americans looking for loans are struggling to overcome deeper financial distress, tighter lending standards and cutbacks by some lenders.
U.S. financial institutions made $382.5 million in Small Business Administration loans to black-owned businesses in the fiscal year ended Sept. 30, according to an analysis of the agency’s data by The Wall Street Journal. Black borrowers received 1.7% of the $23.09 billion in total SBA loans.
The percentage is down sharply from 8.2% of overall SBA loan volume in fiscal 2008. By number of loans, black-owned small businesses got 2.3% of the federal agency’s roughly 54,000 loans last year, down from 11% in 2008. Read more.
The WSJ notes that SBA loans are a crucial source of financing for many entrepreneurs. To explain the drastic decline in loans to black business owners, SBA officials point to tougher scrutiny of loan applications, a decline in small SBA loans and the impact of the financial crisis on the credit scores, – thus, the eligibility – of black borrowers.
Listen to what Roland Martin, Eric K. Ham and Armstrong Williams had to say about the report.