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.
Watch: Fair access to credit
"For many families, building wealth starts with owning their own business. And that American Dream can only grow and thrive with access to fair and affordable credit that’s free from discrimination.”
Small businesses are pillars of their communities—and drivers of the American economy
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.
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
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
But for some, accessing funding can be a challenge
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.
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