The Top States for Minority Entrepreneurs in the US

A recent study conducted by Lendio has identified the top 20 states in the US that are most conducive for minority entrepreneurs to thrive. The study examined eight key factors, including small business loan accessibility, entrepreneurship rates, job growth, and income equality, to determine the rankings.

At the top of the list is Vermont, which boasts high business loan approval rates, significant minority-owned startup growth, low unemployment, and lower income disparities. Following closely behind are Wyoming, South Dakota, North Dakota, and New Hampshire, rounding out the top five states for minority entrepreneurship.

Notably, states with the highest absolute percentage of minority-owned businesses, such as Hawaii, Washington D.C., California, Georgia, and Maryland, did not all make it into the top 20. This was due to lower rates of minority business ownership relative to the state’s minority population, as well as other contributing factors.

Brock Blake, CEO and Co-Founder of Lendio, emphasized the critical importance of access to funding for the success of small businesses. He highlighted the lending gap experienced by minority entrepreneurs, with white entrepreneurs outpacing their Asian, Hispanic, and Black counterparts in securing funding. This disparity underscores the urgent need for targeted policies and programs that address the inequality in access to funding for minority entrepreneurs.

Data from the 2022 Small Business Credit Survey revealed that 52% of white entrepreneurs were fully approved for financing, compared to only 35% of Asians, 28% of Hispanics, and 27% of Black applicants. This stark contrast underscores the challenges faced by minority entrepreneurs in accessing capital for their businesses.

Brock emphasized the need to raise awareness about these issues in order to drive action towards levelling the playing field for all entrepreneurs. He praised the efforts of governments and organizations that are working to provide policies and resources to support underserved communities. Additionally, he expressed optimism about the advancements in loan underwriting technology, which are poised to make access to capital more equitable for all entrepreneurs.

For those interested in delving into the full study, it is available for access on Lendio’s website. The comprehensive report provides valuable insights into the landscape of minority entrepreneurship in the US, serving as a resource for policymakers, business leaders, and aspiring entrepreneurs alike.