IS THERE A LIQUIDITY CRISIS FOR SMALL, BLACK-OWNED FIRMS?

Susan Coleman ()
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Susan Coleman: University of Hartford, West Hartford, CT 06117, USA

Journal of Developmental Entrepreneurship (JDE), 2005, vol. 10, issue 01, 29-47

Abstract: Loans and trade credit are major sources of short-term debt and liquidity for small firms. This article uses data from the 1998 Survey of Small Business Finances to compare the borrowing experience of small firms owned by black men to those owned by white men. Results reveal that black firm owners were more dependent on loans from non-bank sources than white owners. Black men were significantly more likely to have been turned down for their most recent loan and were more likely to be discouraged from applying for loans. Results also reveal that black men were more likely to be turned down for trade credit. Overall, these findings seem to suggest that firms owned by black men have a more difficult time securing sources of short term debt than those owned by white men.

Keywords: Minority-owned businesses; liquidity; borrowing; Survey of Small Business Finance (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:wsi:jdexxx:v:10:y:2005:i:01:n:s1084946705000045

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DOI: 10.1142/S1084946705000045

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