There is increased interest among industry professionals and regulators to help minority-owned small businesses grow and succeed, according to Experian, one of the Big 3 credit bureaus.
As part of an ongoing analytical series on small business, Experian released findings from that explored how U.S. minority-owned small businesses are faring in today’s economy. Of the 2.5 million businesses surveyed, 21% were minority-owned, and approximately 32% were owned by women. These are the two groups that regulators and industry professionals are interested in helping to grow and succeed, according to the report.
The analysis highlights credit characteristics, industry preferences, and demographic attributes of this small but crucial business population.
Minorities struggle with credit management. The study shows that minority-owned small businesses struggle when it comes to credit management compared with the overall small business population. For example, the average business credit score for a minority-owned small business is 49.7, nearly 5 points lower than the general U.S. small business population.
Helping our small businesses prosper through education. A primary objective at Experian is to educate small business owners on the importance of maintaining a positive credit profile. For example, keeping debt levels low and paying bills in a timely manner can help small business owners better position themselves for growth opportunities.
Delinquency rates. In terms of payment behavior, 1.2% of minority small business owners had at least one business credit card account severely delinquent (91-plus days), while 8.3% had at least one consumer credit card account severely delinquent (90-plus days). Comparatively, 1.1% of the general small business owner population had at least one business credit card account severely delinquent, and 6.8% had at least one consumer account severely delinquent.