New academic research conducted by business school professors at Utah State University, Brigham Young University and Rutgers University reveals that minority entrepreneurs are treated significantly differently (see: worse) than their white counterparts when seeking financing for a small business, even when all other variables — their credentials, their companies, even their clothes — are identical.
“It’s like climbing Mount Everest — close to impossible,” one black owner told researchers when asked about the prospects of getting a loan. “I can’t get to the top of Mount Everest.”
“The door’s not open to us,” one Hispanic owner said.
Even if they are approved, the differences don’t end there. The Federal Reserve two years ago released data showing that minority business owners pay interest rates on average 32 percent higher than what their white counterparts pay.