Nationwide, nearly 8 million small 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 40 years old and younger, struggle to obtain the credit needed to start up their businesses or keep them going. Women entrepreneurs start companies with 50 percent less capital than male entrepreneurs, and minority business owners are denied loans at nearly three times the rate of non-minority owners.
On top of that, the financial crisis that shook the entire national economy was damaging for small businesses in general, but especially small 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 interest rates, and prepayment penalties that can quickly drive a small business, out of business. According to a recent survey by seven regional Federal Reserve banks, 20 percent of small businesses applying for a loan or line of credit within the past year sought credit from an online lender, but while 75 percent received at least some credit from these online lenders, only 15 percent of the approved businesses reported being satisfied.
The rapid rise of unregulated, online alternative lenders provides an unprecedented but confusing variety of financing options, many of them designed more to help a lender’s bottom line than to help a small business succeed.
In response, our partners at the Opportunity Finance Network (OFN) created Venturize, an educational website that equips small business owners who have the most trouble accessing traditional credit with the information they need to make the best choice for their small business. Venturize provides clear, trustworthy information and mobile-friendly tools to compare financing options or prepare a loan application—with no strings attached.
Venturize’s easy-to-use, mobile-friendly tools put the power to choose the right loan where it can have the most impact—at the fingertips of women entrepreneurs and small business owners of color under the age of 40. When you’re the Chief Everything Officer, you need options. And small business owners have more options than they think.Visit Venturize today >
At PCV, we’re excited to work with OFN on launching this new, national financial education campaign. OFN is the leading national network of community development financial institutions (CDFIs) like PCV that are investing in opportunities that benefit disinvested communities across the US.