Biases Still Plague Firms Seeking Capital
Sep 15th, 2008 | By Dawn R. Rivers | Category: Politics & PolicyA Senate Small Business Committee hearing last week explored the ongoing challenges faced by women and minorities, and small business owners from distressed urban and rural communities, when it comes to access to capital. The picture portrayed through witness testimony was pretty grim. It was also hauntingly familiar. We learn that collateral and net worth requirements work against disadvantaged business owners, because they often hail from communities in which there has been little personal asset building. Alternative forms of financing are punishingly expensive and can sometimes be damaging to business owner credit scores. And all of this gets in the way of the business owner who wants to re-invest earnings into their firms to grow. These complaints are also common among microbusiness owners that one wonders how much those two universes of business owners — microbusinesses and small disadvantaged businesses — overlap. Which means that, if lawmakers manage to address the issues facing these groups, they may well help micros with access to capital, too.
