Access to Capital presents a major barrier for many AAPI small business owners. With a history of difficulty accessing the opportunities more readily available to non-minority owned businesses, these entrepreneurs have often felt discouraged by the mounting financial hurdles presented by a growing business. Nearly 60% of AAPI business owners don’t believe they would have the ability to increase their payroll, and almost 70% aren’t confident that they could afford new equipment or property. These barriers can cause AAPI entrepreneurs to seek out credit or loans, but these applications are often denied or receive approval but for a lower amount than requested.
The established systems have been built against the AAPI business owners, but thankfully there have been groups and funds made available to help make capital more accessible. The Minority Business Development Agency (MBDA) seeks to advocate for and provide funding towards small businesses owned by minorities, but it often doesn’t receive the funding necessary to operate at its full capacity. This eventually results in AAPI small businesses not getting the help they need from the only federal agency devoted specifically to helping businesses like theirs. Also, there are Community Development Financial Institutions (CDFIs) and Minority Depository Institutions which help allocate capital towards low cost business needs, but not many business owners realize these groups are there to help them. Only 41% of AAPI business owners know about Minority Depository Institutions and 44% are aware of CDFIs, demonstrating well under half of the AAPI small business doesn’t know what resources are available to help them.
In order to make capital more readily available to AAPI small business owners in need of funds, it is necessary to tell public and private sector leaders what is needed - easier and more equitable banking, widespread education on capital opportunities, and ensuring AAPI small business owners can complete their applications for funding. Legislation which achieves this would give AAPI small businesses the chance to start, grow and achieve their goals. Another great step is telling your Members of Congress how important it is that the MBDA receives full funding. The MBDA receiving the support it needs leads to AAPI small businesses receiving the support they need.
