Published May 29, 2013
The small business sector is laden with stories of inequity and barriers to entry. The work of small businesses are vital ingredients to the national economy. Small businesses remain small from one access to capital, information and opportunity. The opportunity to hear from one small business journey into obtaining loans is a venture not in isolation but reflective of many. The story “Loans.org Uncovers Major Shift in Minority Business Financing Patterns” is another voice in the crowd.
PR Web reported this keen point on one area within small business. The article cited “Through an interview with African American businesswoman and Inspirador CEO Dilia Wood, loans.org found that minority business owners are turning to crowdfunding after being discriminated against while applying for business loans through traditional avenues.”
The failure to overlook disparity and barrier to entry online may be another area of discrimination. Social media and online activity is not a neutral spectrum but has advantages to leverage access where the natural world may be laden with social potholes that collectively as society are not ready to fully address.
“In 2006, Wood applied for a business loan with the SBA 504 loan program to purchase and renovate commercial real estate. She found that, for minority entrepreneurs, the world of business financing isn’t a level playing field” in providing a business loan and she speculates, traditional sources may not be needed in the near future. She shared her thoughts as a part of a “comprehensive article examining racial discrimination in the realm of business loan financing”.
The traditional loan structure is still not a neutral or even playing field apparatus. Despite laws redlining and practices of targeting race, gender, marital status and zip codes are relevant to loan practices. The distributive model of banking can feel transactional but all the factors of discrimination are still active and systemic. This for some may seem or to appear false and invalid but inequities present that drive the economic divide. This is not only applicable to race, gender and education but also, to cultural associations that predate the current applicant.
“She believes crowdfunding will play a key role in assisting minority entrepreneurs. Organizations such as UNITE are forming to crowdsource funds specifically for under-represented minority entrepreneurs and artists.”
We hope that technology can be a open space to remove bias. Crowdfunders organizations will replicate the real world in which the focus will be brought to bear on the known versus the unknown.
The question will real world bias infect and intersect with the online world and become pervasive and/or will the technology allow current practices to be dismantled. One example is cyberbullying. Bullying has become a normalized practice that has migrated to the online world. The challenge is to reduce the discriminations online by education or developing models offline that prevent the triggering of bias and discrimination. Online is not a panacea.
- Small Business Realities in the New Economy (landsdssustainable.com)
- Small Business Loan Fundamentals (cashadvancemerchantaccount.wordpress.com)
- Raising finance for your small business (theformationscompany.com)
- Crowdfunding and FEMA, A Disaster Recovery Plan for Small Businesses We Can All Implement Now (projecteve.com)
- Commerce Department Announce $6.3 Million Minority Business Grant Competition (blackamericaweb.com)
- Small Business Loans For Women (leccoworkshop.com)