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Race and Ethnicity

Research indicates that the number of firms owned by people of color has grown in recent years, suggesting that these businesses may comprise an increasingly large share of the small-business sector. However, Small Business Credit Survey (SBCS) data consistently show that firms owned by people of color—both new businesses and established ones—face more challenges than their white-owned counterparts and are more likely to be denied financing when they apply.

The SBCS is one of the most valuable data sources for understanding the experiences of small businesses across categories of racial and ethnic ownership. The survey has been instrumental in identifying disparities in access to financing, tracking the challenges specific to firms owned by people of color throughout the COVID-19 pandemic, and—more broadly—better understanding the credit-seeking experiences of these businesses.

The SBCS uses US Census-defined categories of race and ethnicity. We use simplified, mutually exclusive race/ethnicity labels to indicate that more than 50 percent of the business is held by owner(s) of the given race/ethnicity. As such,

  • “American Indian or Alaskan Native” refers to non-Hispanic American Indian or Alaskan Native.
  • “Asian” refers to non-Hispanic Asian or Pacific Islander.
  • “Black” refers to non-Hispanic Black or African American.
  • “Hispanic” refers to all firms owned by individuals of Hispanic or Latino ethnicity, regardless of their race.
  • “White” refers to non-Hispanic white, Middle Eastern, or North African.