Over the last four years, Asian female business owners were more likely than other nonwhite female entrepreneurs to have less access to credit and to start firms with smaller grubstakes, according to a study being released today.
Women's business advocates speculated that the change was due at least in part to the economy, as lenders tightened purse strings and Asian business owners in segments hard hit by the downturn grew wary of accumulating more debt.
Nearly half of the Asian female business owners polled said they launched their firms with $25,000 or less, according to the study by the Center for Women's Business Research. At the same time, only about 11% of Asian female entrepreneurs had $100,000 or more to start their businesses. The Washington-based center conducted a similar study in 1998.
"If we look at the '90s, that was a period of such tremendous growth in terms of business spending," said Sharon Hadary, executive director of the center. "By 2000, the bottom had fallen out."
In the study, which was funded by Wells Fargo & Co., researchers polled more than 800 female business owners nationwide across ethnicities in April and May.
In many categories, the study results showed no statistically significant change over the years. Yet some of the largest changes disproportionately affected Asian female business owners.
For example, while fewer Asian women said they had $100,000 or more in business credit to launch their enterprises, the number of African American female business owners with at least that much credit more than doubled--to 13% of entrepreneurs this year from 6% in 1998.
Advocates for businesswomen were at a loss to fully explain the differences.
Philip Borden, executive director of Long Beach-based Women's Enterprise Development Corp., a nonprofit group, noted that many Asian-owned firms are concentrated in sectors hard hit by the downturn, including tourism and travel. That might make business owners more wary about accessing larger amounts of credit, he said.