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Shining a light on small business lending

The American Dream of starting a business has often been a path to prosperity for both entrepreneurs and the communities they serve. We know that families build wealth by starting small businesses. And we know that small businesses grow and thrive by accessing fair and affordable credit. Yet, there’s much we don’t know about the challenges that small businesses—especially those owned by women and minorities—face in trying to gain that access to business capital.

Small businesses are pillars of their communities—and drivers of the American economy

African American farmer, small business with American flag and open sign, woman business owner

Small businesses are the engines of growth in our communities, driving wealth creation and upward financial mobility. When small businesses succeed, our economy is stronger, more equitable and more resilient.

Photo of a farm field with buildings and small silos

There are 33.2 million small businesses in the U.S.

Small businesses accounted for more than 99.9% of all U.S. business. They employed 61.7 million people, or 46.4% of the American workforce.

Source: U.S. Small Business Administration (SBA) 2022 Small Business Profile

18.3 percent, or about 1 million businesses with employees, are minority-owned

9.7% Asian-owned
5.8% Hispanic-owned
2.2% Black (African-American)-owned
0.4% American Indian or Alaskan Native-owned
0.1% Native Hawaiian or other Pacific Islander-owned

Source: 2019 Annual Business Survey (ABS), U.S. Census Bureau

Latinx man using power drill in his workshop.
White woman in apron etching in her workshop

19.9 percent, or about 1.1 million businesses with employees, are woman-owned

Businesses without employees are owned almost equally by both women and men.

Source: 2019 Annual Business Survey (ABS), U.S. Census Bureau

5.9 percent, or almost 340,000 businesses with employees, are veteran-owned

Approximately 3.9 million Americans are employed by veteran-owned businesses.

Source: 2019 Annual Business Survey (ABS), U.S. Census Bureau

White servicemember in his home.

But for some, accessing funding can be a challenge

Japanese-American man on his phone in his shop.

Entrepreneurs often source capital from their personal and family savings to get their business off the ground

64.4% use personal and family savings
16.5% use business loans from banks or other financial institutions
9.1% use personal credit cards
8.7% use personal family assets (other than the owner's savings)

Source: Annual Survey of Entrepreneurs 2016 , US Census Bureau

Ideally, small business owners who want to use credit to grow their businesses would be able to obtain it. But some entrepreneurs struggle to access fair, affordable loans.

Entrepreneurs deserve a fair chance at business ownership

The CFPB and other government agencies help ensure equal credit opportunities by enforcing the Equal Credit Opportunity Act (ECOA), which applies to both business and consumer credit. ECOA makes it illegal for a lender to discriminate based on a business owner’s race, sex, religion and other characteristics in any aspect of new and existing business loans.

Learn more about credit discrimination and your rights.

Resources to help you start or grow your business

When Congress created the CFPB, it tasked us with collecting better information from small business lenders, including data on lending to minority- and women- owned small businesses. By gathering more data about whether and how these businesses access credit, the federal government can facilitate enforcement of fair lending laws while also enabling community organizations and lenders to identify needs and opportunities for women-owned, minority-owned, and other small businesses.

Learn more about our efforts to support small business owners