Using a linked database of Paycheck Protection Program (PPP) loans and Yelp-listed restaurants, we document that businesses owned by minority racial groups are more likely to use fintech lenders than traditional lenders. We develop a simple two-sided matching model to show that this phenomenon can be potentially attributed to differences in performance among borrowers, racial disparities in lending relationships, and race-dependent values of borrower-lender matches. Empirically, we do not find consistent evidence that operational performance is an explanation. We find that minority-owned restaurants are less likely to have lending relationships and that restaurants without lending relationships are more likely to use fintech lenders. We also find a more negative minority-non-minority gap in operational performance for fintech lenders, suggesting minority-owned businesses have higher matching values with fintech lenders. We do not find a similar pattern for first-time bank participants, community development financial institutions, credit unions, or other non-federally insured lenders. Overall, our results suggest that there are racial barriers in traditional loan distribution channels and this can be at least partially addressed by fintech lenders.
As the pandemic forced shutdowns across the globe, U.S. government entities at the federal, state and local levels worked swiftly to secure known drivers of economic growth and job creation – including entrepreneurial ecosystems and small businesses. And while the programs implemented were widely lauded as successful, the story of who benefitted – and who did not – is more complex. This week’s Kenan Insight explores our experts’ key findings around the roles of policy and implementation in supporting equal access to opportunity.
Entrepreneurs from diverse backgrounds face a variety of challenges in accessing resources, expertise and funding. Hear experts from our 2021 Frontiers of Entrepreneurship Conference discuss persistent issues and promising solutions for creating vibrant entrepreneurial ecosystems.
The COVID-19 pandemic increased economic inequities in a number of ways, including in access to external capital – and while 2020 marked a break-out year for venture-backed firms, the pandemic hit many main street businesses hard. In this Kenan Insight, we explore the forces driving the haves and have-nots in this new economic climate, as well as actionable policy solutions as government support programs wind down.
A recent TechCrunch article describes the new collaboration between the Kenan Institute-affiliated Entrepreneurship Center, Duke University, Stanford University and others to grow and support founder diversity in the tech industry.
Mark Little, executive director of CREATE, a Kenan Institute-affiliated center, has been named to the inaugural North Carolina Black Entrepreneurship Council (NC BEC). The council was founded by NC IDEA, a private foundation committed to supporting entrepreneurial ambition and economic empowerment in North Carolina.
Small businesses are an undeniable engine of growth for the United States, comprising 99 percent of all U.S. firms and driving nearly half our total economic activity. Yet small business owners across the country lack sufficient capital to succeed, grow and scale. The Kenan Institute has conducted a new analysis on the role of the Small Business Administration’s SBIC program in providing capital to the often-overlooked small businesses operating outside of metropolitan centers, as well as those owned by women and underrepresented minorities. You can access an overview of our findings, as well as key takeaways for business and policy leaders, by clicking below.
Please join the Kenan Institute for an exclusive conversation with Squad Founder and CEO Isa Watson on Thursday, Feb. 13. The event takes place in Kenan Center 204 and is part of the Dean’s Speaker Series, hosted by UNC Kenan-Flagler Business School's Senior Associate Dean for Academic Affairs Dave Hoffman.
An inside look at the plenary sessions of the fourth annual Frontiers of Entrepreneurship conference, which convened practitioners, policymakers and academics to discuss the most challenging issues in the field of entrepreneurship and set the agenda for future research and policy.
The third annual Kenan Institute Frontiers of Entrepreneurship Conference convened thought leaders from academia, industry and government to debate the most challenging current issues in the field of entrepreneurship and set the agenda for future research and policy. It was held on Jan. 31 and Feb. 1, 2019 at The Breakers Palm Beach.
The Great Recession of 2008 came with a counterintuitive twist – the unprecedented growth of minority-owned small businesses in the U.S. But although the data shows that the representation of minority firms in the small business ecosystem increased from 2007 to 2012 while the percentage of white-owned firms decreased, the larger question is whether those minority firms also made headway toward achieving equity or parity with white-owned businesses.