Want to start a business? It’s easier for white women.
Female entrepreneurs find it easier than men to raise capital for new business ideas, new research has discovered. Graduates also have an easier time but ethnic minorities, particularly black entrepreneurs, find it harder to secure banks loans.
The results are part of research which canvassed 400 SMEs across the
“The accepted wisdom has been that banks offer plenty of finance and there is little or no difficulty in accessing it,” explains Jonathan Scott, “We wanted to explore the extent to which entrepreneur’s personal characteristics impact upon their ability to access this resource.”
When asked if they had experienced difficulties in raising finance for their businesses 50 per cent of black entrepreneurs said they had, compared to 22 per cent of Asian and only 13 per cent of white respondents. Black manager/owners were found to be twice as likely (than the average) to re-mortgage their homes.
“Ethnicity makes a real difference in sources of finance with black entrepreneurs more likely to re-mortgage their homes, use personal bank loans or personal credit cards – this willingness to accept high risk could be borne out of a complete frustration coupled with determination to start-up,” continues Jonathan.
Men were more likely to report difficulties (18 per cent) than females (12 per cent) in securing bank loans and only 8 per cent of graduates said they had experienced problems.
“By highlighting the issues faced by
Richard Roberts from BarclaysBank Small Business Research Team says: “We welcome any review of the SME market place that provides detailed analysis of the interaction between banks and customers. A main cause of business failure at start up is under-capitalisation and raising start up finance is often difficult.”
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