Nationwide, nearly 8 million smaller businesses owned by people of color, and 11.3 million women-owned small businesses, are powering their communities.
But entrepreneurs of color and women entrepreneurs, particularly those Age forty and younger, struggle to obtain the credit needed to launch their businesses or have them going. Women entrepreneurs start companies with 50 % less capital than male entrepreneurs, and minority business people are denied loans at nearly three times the rate of non-minority owners.
On surface of that, the financial crisis that shook the whole national economy was damaging for small businesses generally, but especially smaller businesses owned by people of color, as large banks cut back on lending to small businesses.
In the wake of the recession, a plethora of online lenders are promising small business owners “quick and easy” cash, without disclosing the hidden fees, high rates of interest, and prepayment penalties that may quickly drive a small business, out of business. According to a current survey by seven regional Federal Reserve banks, 20 percent of smaller businesses trying to get a loan or line of credit in the past year sought credit from a web-based lender, but while 75 percent received a minimum of some credit from all of these online lenders, only 15 percent from the approved businesses reported being satisfied.
The rapid rise of unregulated, online alternative lenders provides an unprecedented but confusing number of financing options, many of them designed more to assist a lender's bottom line rather than help a small business succeed.
In response, our partners in the Opportunity Finance Network (OFN) created Venturize, an academic website that equips small businesses who've probably the most trouble accessing traditional credit using the information they need to get the best choice for their small business. Venturize provides clear, trustworthy information and mobile-friendly tools to compare financing options or make a loan application-with nsa.
Venturize's easy-to-use, mobile-friendly tools put the power to choose the best loan where it can have the most impact-at the fingertips of women entrepreneurs and small businesses of color under the age of 40. When you're the Chief Everything Officer, you need options. And small businesses have more options compared to what they think.
At PCV, we're excited to utilize OFN on launching this new, national financial education campaign. OFN may be the leading national network of community development banking institutions (CDFIs) like PCV which are purchasing opportunities that benefit disinvested communities across the US.
