Barriers in Small Business Funding: Overcoming the Challenges of Circumstance, Systems, and Persons

Small business owners are faced with many challenges on their entrepreneurial journeys. Access to capital, financing options, and credit building opportunities are all essential for small business growth. But many times, these essential elements are not as easily accessible to minority, immigrant, and women small business owners.

The Privilege Wall

There are times when people are so busy looking up that they don’t pay attention to what’s happening in any other direction. Some people, due to circumstances and systems that are historically and endemically in their favor, often think their easy journey to success – full of opportunities with few headwinds – is the same for everyone. If other people are not as successful as they are, then it must be because those other people did something wrong, or are just plain lazy. This can cause entire demographics to get painted with a very large brush, instead of looking for the “reasons behind the reasons.”

Minority business owners, for instance, are statistically successful, generating over $1.8 trillion annually. However, racist notions that have existed for centuries have carried over into systems – such as education and finance – to gate off minority business owners from getting the information and capital they need to launch, maintain, or grow their operations. Similarly, women-owned businesses in the United States total over 12 million and similarly generate upwards of $1.8 trillion, yet they are statistically approved for less funding than their male counterparts but at least $5,000 – even though male-owned businesses have a lower success rate.

The reluctance to open the doors or reach and reach out to underserved groups only perpetuates the cycle, leaving women and minorities to work harder to maintain and grow their operations. The line that these businesses succeed because the system works isn’t true – they succeed in spite of the system. And the truth is, regardless of race, gender, religion, or any other factors, no one should have to work harder just to get to the starting point.

We may meet up with bullies who tell us to work harder, or they may point to exceptions and say, “Well, if this person received money and was successful, then obviously the system is fair.” The truth is the exceptions only prove how flawed the system is, even at its most basic level, which is information. A person in an economically depressed area with a great idea and the ability to run a great business is unable to get funding when compared to a similar person in an affluent area with the ability to go online and make a few clicks and network with lenders – but this leads to a larger discussion on why those basic systems are not level for women and minority business owners, why people are marginalized despite strong performance records, and why accessibility to opportunity is lowered for a few while it is consistently placed out of reach for others.

Leveling the Playing Field

At Nanaki Capital, we offer financing solutions to minority and women entrepreneurs. We believe opportunity should not be unreachable due to race, gender, or circumstance. Contact us today and we will listen to understand your business financing needs, so we can help you reach your goals while minimizing obstacles.

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