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The U. S. Census Bureau reports that during the economic expansion from 2002 to 2007, the number of businesses owned by minorities increased 45 percent, led by African American owners, who experienced a 60 percent increase in businesses owned. White owned firms increased only about 13 percent during this period. While minority owned firms now account for more than 20 percent of businesses, they remain relatively small, employing only around 5 percent of the nation's employees. The vast majority of small businesses are seeded with the personal or family savings of the founder. While the scale may differ, the reliance of savings differs little across ethnic groups. Reliance on home equity and credit cards, important sources of start up capital, also display only minor differences across race, with minorities being slightly more dependent on credit cards and whites more often tapping home equity. As inflation and record low interest rates reduced the returns to savings, this decline may explain some of the dramatic fall in new business creations. The long run trend decline in savings has been accompanied by a similar decline in entry rates among small businesses. However, non bank lending is becoming an increasingly important source of capital.

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is business loan interest tax deductible hubpages. com › … › Mortgages and Loans › Loan OptionsIf you need to know how to start a business with no money than you must have … Small business loans for people with bad credit can be found from a variety of …Introduction Small businesses are critical to fueling the nation’s economic growth. They employ roughly half of all Americans and account for more than 60 percent of net new jobs. 1 Their ability to generate new jobs depends in large part on access to credit. In the wake of the recent recession, small businesses’ demand for credit waned as they faced the more immediate challenges of weak sales and heightened business uncertainty. Now, as the business outlook improves, credit demand from small businesses is beginning to strengthen. However, access to credit remains a challenge for some. Lower real estate values and the cumulative effects of lower revenues have damaged small businesses’ credit capacity, and banks’ lending standards—although no longer tightening—loosened only marginally in 2010. In addition, as evidenced by high levels of problem banks, the recession has affected the ability of some banks to lend as they focus on correcting existing problems. In response to these issues, policymakers and regulators continue to actively seek ways to facilitate the flow of credit to small businesses. On January 13, 2011, the FDIC hosted a forum, “Overcoming Obstacles to Small Business Lending,” to identify credit related issues facing small businesses and potential solutions.

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”Conclusion There are no easy solutions to the obstacles facing today’s small businesses.

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Now, as the business outlook improves, credit demand from small businesses is beginning to strengthen.

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