At our meetings, we heard a number of comments citing a comparative lack of capitalization, weaker collateral values, and lower credit scores for many minority small businesses, which leave these firms with less ability to absorb economic shocks.
For example, in Los Angeles, we heard that the decline in residential property values has had a significantly adverse impact on businesses owned by Asian Pacific Islanders who relied heavily on home equity for financing. We heard about the same issue with respect to many African American- and Hispanic-owned businesses around the country.