When I read “Dis-Credited,” Woodstock Institute’s recent study on racial and income disparities in business lending, I saw in black and white what I have also experienced in flesh and blood.

Woodstock Institute’s most recent report highlights disparities in access to small business loans in the Chicago region. Between 2008 and 2012, businesses in wealthier or predominantly white Census tracts were more likely to receive loans or credit from major financial institutions than businesses in low-income and majority-minority tracts. This creates a substantial business credit gap and allows for little room for businesses in low-income and majority-minority communities to grow. Essentially, marginalized communities become even more marginalized through unbalanced bank lending. However, there is another demographic that also struggles to get the small business loans they need: women.

Lack of access to credit could limit economic opportunity in disinvested communities

CHICAGO—There are significant disparities with respect to both race and neighborhood income in access to credit for businesses in the Chicago six county region, a new report from Woodstock Institute found. From 2008 to 2012, the business loan gap (that is, the difference between the total amount of loans made and proportional distribution of loans) in majority minority communities was estimated to be nearly $1.5 billion, and the gap in low-income communities exceeded an estimated $817 million.

Read the report

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