When it comes to creating an atmosphere that fosters success by minority entrepreneurs, Wisconsin has plenty of room for improvement.
Wisconsin recently ranked 48th on a list of the best states for minority entrepreneurs compiled by Lendio, an online small business lending platform.
While minorities make up 21% of Wisconsin's population, less than 7% of businesses are owned by minorities. Between 2021 and 2022, it had a decline in the number of approved Community Advantage loans, which are targeted for small businesses in underserved markets.
Wisconsin also has a low level of overall income inequality, the study found.
The other worst U.S. states for minority entrepreneurs are Mississippi, West Virginia, North Dakota and Montana, the study found. The best states for underrepresented entrepreneurs are Hawaii, Maryland, Maine, Delaware and New Jersey.
A national view
The study was based on data from the U.S. Small Business Administration (SBA) and the U.S. Census Bureau.
Nationally, the number of businesses owned by Black, Latinx and Asian Americans reached record highs in 2020 with 1.2 million businesses, more than double the amount in 2007. More than half of the approximately two million businesses started in the U.S. over the past 10 years had minority founders.
The study also revealed a racial gap in funding approvals for entrepreneurs. More than half of white founders are approved for loan financing, compared with 35% of Asian American founders, 28% of Latinx founders and 27% of Black founders. Latinx founders had the highest denial rate at 51%, followed by Black founders (47%), Asian American founders (40%) and white founders (30%).
