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.
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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.