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By Patty Juarez, EVP & Head of Diverse Segments Commercial Banking, Wells Fargo Ask most business owners about their company and you’ll see faces filled with pride and passion. Launching and leading a business is typically the culmination of years of hard work; for many, a lifelong
dream. Now, consider the entrepreneurial journey for minority- and women-led businesses. They encounter far more detours on their road to success than their peers. Even in the 21st century, they can face a rigid system more interested in homogenizing diversity than celebrating it. Common obstacles for diverse business owners include:
The result is slower growth and unnecessary hurdles to overcome. I’ve witnessed it firsthand, watching my father, a Hispanic business owner, struggle to navigate traditional avenues and obtain appropriate financing. It’s one of the reasons I chose banking for my career and work today as a vocal advocate for others. Taking a more inclusive approach to lending Slowly, the landscape is changing to level the playing field for business owners of all races, ethnicities, genders, and backgrounds. One way the financial services industry is supporting this critical effort is through active diversity initiatives. At Wells Fargo, I lead a team of committed professionals as part of our Diverse Segments Commercial Banking team. Taking a more inclusive approach to lending makes sense and is good business. Women and minorities represent some of the fastest growing market segments.
While these numbers are impressive, progress for underserved populations still lags behind other segments. For example, while approximately 40 percent of the U.S. population identify as minorities, they represent just 20 percent of business owners.3 These minority-owned businesses are less likely to have their financing needs met. In a recent economic survey, even with good credit scores, just 13 percent of Black-owned businesses that applied for traditional financing received all the funds they sought, compared to 20 percent of Hispanic-owned, 31-percent of Asian-owned and 40 percent of white-owned firms.4 This COVID-19 pandemic has also exacerbated inequalities in the financial system, making a disproportionate impact on this same demographic. Between February and April 2020, the number of Black business owners dropped by 41 percent; Latinx business owners declined by 32 percent.5 Making a conscious commitment to underserved markets What does a conscious commitment to diversity look like? Business owners should expect efforts like these from their financial institution:
How to find the right banking resource If you’re a business leader or entrepreneur from a population that’s traditionally underserved, do your due diligence to find the right banking resource for your needs. Consider:
Asking in-depth questions like these helps business owners make smart decisions and ultimately, find the right financial partner. While systematic change doesn’t happen overnight, positive progress is taking place. There’s a collective raising of awareness and new players entering the financial services industry. More established banks like Wells Fargo are mobilizing and committing resources to widen financial access for diverse business owners. ©2022 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. References Explore moreWhich of the following is one of the recent trends in small business start ups quizlet?one of the most significant recent trends in small-business start-ups is the rapid emergence of electronic commerce.
Which of the following types of businesses is most common in the United States quizlet?Corporations are by far the most common type of business organization in the United States.
What type of company has stock that is widely held and available for sale to the general public?Companies with no such restrictions on stock sales are called public corporations; stock is available for sale to the general public.
What is the most important source of money for new business start ups quizlet?Loans are the most important sources of money for new businesses. Lending institutions are more likely to help finance the purchase of an existing business rather than the start-up of a business from scratch.
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