Loans from the Small Business Administration held by banks to small Hispanic owned businesses fell 84 percent from 2007 to 2009, the highest percentage reduction in minority business loans, was reported Monday.
According to the California Reinvestment Coalition, a nonprofit advocating for minorities equal access to banks, “small businesses” that create more work than any other segment of the economy have no access to credit, what they are cutting staff and many have to close. “
The Coalition explained that the number of loans to small businesses in California declined by 1.5 million between 2007 and 2009, meaning a reduction of 21,000 million dollars.
Five of the largest banks in the Hispanic market, Bank of America, Wells Fargo, U.S. Bank, Union Bank and Citibank cut its SBA loans to Hispanic businesses by 89 percent.
As a result of the economic crisis and lack of credit support, in Los Angeles closed on 25 percent of businesses in 2009 compared to 2007, which meant the city has lost more than 150,000 jobs.
The report “Small Business Access to Credit: The Little Engine That Could” also notes that small businesses owned by African Americans between 2007 and 2009 suffered a decrease in access to credit 81 percent.