Whitman School of Management at Syracuse University
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Abstract Details

The Use of Debt by Black-Owned Firms: Recent Evidence from the 2003 Survey of Small Business Finances
Vol. Volume 13, Number 1 March/2008

Susan Coleman

Black-owned firms are growing in terms of both number and economic importance. They play an important role in providing jobs as well as products and services, particularly in urban communities. In spite of this, prior research indicates that black-owned firms experience greater difficulty in securing sources of external capital. This study re-visits this issue using newly released data from the 2003 Survey of Small Business Finances. Results reveal that black-owned firms were no less likely to have loans than white-owned firms controlling for firm and owner characteristics. Nevertheless, black-owned firms were still significantly more likely to be turned down for loans and more likely to refrain from applying because they assumed they would be turned down. Further, black firm owners who were approved for loans paid significantly higher rates of interest.