Financing Patterns of Minority-Owned Small Business
This study examines the initial, seasonal, and refinancing characteristics of 67 minority business owners. The results are compared to the financial characteristics of women-owned and mixed ownership small firms. Minority-owned firms are found to rely primarily on equity to finance initial operations. Minority business owners' initial debt was commonly obtained through Small Business Administration (SBA)guaranteed loans and government grants. A very large percent of the minority business owners who acquired debt were required to provide numerous supporting documents. The results indicate that minority firms that experienced difficulty in obtaining initial capital continue to experience financial problems relating to operations.
Brigham, E., & Gapenski, L. (1993). Intermediate financial management (4th ed.}. New York: Dryden Press.
Brennan, M., & Schwartz, E. (1978). Corporate issue taxes, valuations, and the problem of optimal capital structure. Journal of Business, 51, 103-113.
Carter, R., & Van Auken, H. (1991). A comparison between small business and large corporations: Interrelations among position statement accounts. Journal of Business and Entrepreneurship, 2, 73-80.
Dodge, H., & Robbins, J. (1992). An empirical investigation of the organizational life cycle model for small business development and survival. Journal of Small Business Management, 29, 27-36.
Feldman, H., Koberg, C., & Dean, T. (1991). Minority small business owners and their paths toownership. Journal of Small Business M anagement, 29, 12-27.
Gilbert, L., Krishnagopal, M., & Schwartz, K.(1990). Predicting bankruptcy for finns in financial distress. Journal of Business Finance and Accounting, 14, 595-606.
Laitinen, E. (1991). Financial ratios and different failure processes. Journal of Business Finance and Accounting , 18, 649-673.
Modigliani, F., & Miller, M. (1958). The cost of capital, corporate finance, and the theory of investment. American Economic Review, 261-97.
Scott, W. (1983). Financial performance of minority versus non-minority-owned businesses. Journal of Small Business Management, 21, 42-48.
Thomas, J., & Evanson, R. (1987). An empirical investigation of association between financial ratio use and small business success. Journal of Business Financeand Accounting, 14,555- 571.
Van Auken, H., & Carter, R. (1989). Acquisition of capital by small business. Journal of Small Business Management, 29, 1-9.
Van Auken, H., Gaskill, L., & Kao, S. (in press). Acquisition of capilal by women entrepreneurs: Patterns of initial and refinancing capitalization. Journal of Small Business and Entrepreneurship.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.