A report from the Small Business Administration recently focused on Small Business Investment Company data. Using information from 20 years of filings, the report looked at the relationships between diversity and investment companies. Though some of the questions that prompted the study didn’t lead to easy answers, the report did establish some connections between SBIC diversity and their actions in the business world.
Overall, the report found that investment companies with racial and gender diversity did not show any difference in performance, positive or negative, from those managed by white men. However, the makeup of an SBIC did seem to impact what kinds of companies they were likely to invest in.
Specifically, investment companies with racial diversity made 7 percent more investments in companies led by minority CEOs (although this statistic only comes from two years of observed data, rather than the full 20). Similarly, investment companies with gender diversity were found to contribute more to portfolio companies with female CEOs.
In a press release announcing the report, one of the professors behind it, Dr. John Paglia, explained the positive signs of these results.
“There is still more to do, but from this research, it is clear women and minority leaders at small business investment companies play an important role in bridging a lending gap to women and minority-owned small businesses,” he said.
Growth Capital can guide loan applicants through the processes necessary for financial support. This comes from a full understanding of how to get an SBA loan that takes the application process into account, from the initial work with us to the various financial statements needed to supplement your case. Growth Capital also provides descriptions of exactly which entities are eligible and what special use cases can also apply under this loan program.
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