Minority women entrepreneurs have hard time securing funds

Global Business

Minority women in the U.S. are the fastest growing demographic starting businesses according to a 2009 study by the Center for Women’s Business Research (pdf). The report found that Hispanic and African American women are 3-5 times more likely to start businesses than white women, however they have a harder time securing funding for their businesses. CCTV America’s Karina Huber reported this story from New York.

Minority women entrepreneurs have hard time securing funds

Minority women in the U.S. are the fastest growing demographic starting businesses according to a 2009 study by the Center for Women's Business Research (pdf). The report found that Hispanic and African American women are 3-5 times more likely to start businesses than white women, however they have a harder time securing funding for their businesses. CCTV America's Karina Huber reported this story from New York.

Charmaine DaCosta, owner of Crude Food, prepares limeade the way they do it her native Jamaica, and she’s very specific about her process.

“The way you squeeze your limes is very important,” explained DeCosta. “So you don’t want to get the lime peel or the lime oils or the pith in your product.”

The 53-year old runs the business entirely by herself, making, bottling, and delivering the limeade along with the help of her daughter.

DaCosta bottles her limeade in a shared work space where she pays $220 dollars per seven-hour shift. It works for the time being, but it is not ideal. Her goal is to one day have her own personal space and to become profitable by ramping up production.

“I need to scale to something like 100,000 bottles a year. We’re at a couple of thousand,” DaCosta said.

DaCosta won a business plan competition that included a cash prize. Even so, she’s had to sell her house to keep the business afloat. Securing funding the traditional way would be very costly.

“I have had some offers for loans and literally I think I would have to give up my first born to pay it back,” said DaCosta.

Cynthia Franklin, a Senior Associate Director at the Berkley Center for Entrepreneurship and Innovation at NYU Stern, said minority women face greater challenges than others when looking for financing.

“Even if a minority woman has the same credit profile and the same credit history as a white male going for a loan, she’s still less likely to be approved for that loan,” Franklin said.

Despite the challenges, however, DaCosta has remained undeterred.

“I’m thinking that in 25 years, this thing is going to be huge in 25 years, I’m sorry, I’ll probably oversee some stuff but I’m not lifting any boxes, I will not be interested in doing any of that,” said DaCosta. “I will be interested in making sure there is a legacy for my kids.”