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Press Room May 2012


Research Summary: Immigrant Entrepreneurs and Small Business Owners, and their Access to Financial Capital

Robert W. Fairlie, Ph.D., Santa Cruz, CA. 50 pages. Under contract SBAHQ-10-R-0009.

Purpose

This study, using data from the 2007 U.S. Survey of Business Owners, attempts to complete the picture on immigrant entrepreneurship and addresses questions such as the following: What hurdles do they face accessing capital? How do they use capital? The importance of immigrant entrepreneurs to the U.S. economy has been very well documented in

Immigrant Businesses Start with More Capital than Others Do

Immigrants make a significant contribution to business ownership and formation, according to a new study from the Office of Advocacy. Immigrant Entrepreneurs and Small Business Owners, and their Access to Financial Capital found that 10 percent of immigrants own a business. Nearly 20 percent of immigrant-owned businesses started with $50,000 or more in startup capital, compared to 15.9 percent for non-immigrant-owned business. The study uses data from the 2007 U.S. Survey of Business Owners and the 1996-2010 Current Population Survey.

“Immigrant entrepreneurs are essential to our nation’s growth and economic prosperity,” said Chief Counsel for Advocacy Winslow Sargeant. “Immigrant entrepreneurs make our nation more competitive and serve as reminders of the American dream.”

The most common source of startup capital for immigrant-owned businesses is personal or family savings, with roughly two-thirds of businesses reporting this source of startup capital. Other commonly reported sources of startup capital by immigrant-owned businesses are credit cards, bank loans, personal or family assets, and home equity loans. Overall, the sources of startup capital used by immigrant-owned businesses do not differ substantially from those used by non-immigrant-owned firms.

The Small Business Economy, 2011

Quarter by quarter, small businesses with fewer than 500 workers continued to outperform large firms in net job creation three out of four times from 1992 through 2010, when private-sector employment rose, according to data in the latest edition of The Small Business Economy.

The newest edition is formatted to improve the accessibility of the data in an online series of tables on small business in the economy and small business financing. This rich collection of information about small business contributions to the economy and trends over time is offered this year, for the first time, in tabular form online in place of the paperback report.

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