Analysis highlights credit characteristics, industry preferences and demographic attributes of minority small-business owners.

COSTA MESA, Calif., March 17, 2016 — As part of its analytical series on small businesses, Experian®, the leading global information services company, today announced a new study that offers insights into the health of minority-owned small businesses in the U.S.

“Given that minority-owned small businesses make up such a small percentage of the general small-business population — approximately 21 percent — industry professionals and regulators are becoming more interested in helping this segment grow and succeed,” said Pete Bolin, director of consulting and analytics for Experian. “A primary component of accomplishing this objective is educating small-business owners on the importance of maintaining a positive credit profile. For example, keeping debt levels low and paying bills in a timely manner can help small-business owners better position themselves for growth opportunities.”

INFOGRAPHIC: Snapshot of minority-owned small businesses

Findings from the study show that, compared with the overall small-business population, minority-owned small businesses are slightly behind when it comes to credit management. For example, the average business credit score* for a minority-owned small business is 49.7, nearly five points lower than the average for the general small-business population. As a consumer, the average credit score for a minority small-business owner is 707, 15 points lower than the overall average for small-business owners.

In terms of payment behavior, 1.2 percent of minority small-business owners have at least one business credit card account that is severely delinquent (91-plus days), while 8.3 percent have at least one consumer credit card account that is severely delinquent (90-plus days). Comparatively, 1.1 percent of the general small-business owner population have at least one severely delinquent business credit card account and 6.8 percent have at least one severely delinquent consumer account.

Most popular business types
Experian’s analysis also identified the most popular industries for minority-owned businesses. The analysis shows that the industry of choice was eating places, which accounted for 7.3 percent of minority-owned businesses, followed by beauty shops (5.8 percent), legal services (2.9 percent), business services (2.7 percent) and real estate (2.5 percent).

Regardless of industry, the analysis found that the average consumer income for these business owners is $92,489. This is similar to the general small-business owner population, which has an average consumer income of $92,338. From an education perspective, 65.6 percent of minority small-business owners have at least some college experience, just slightly less than the general business population (68.3 percent).

“Gaining insight into the trends and behaviors of the small-business community is imperative given its importance to the growth and success of our overall economy,” continued Bolin. “While a person’s ethnicity will never be used in a credit decision, understanding the trends of minority-owned small businesses enables credit grantors to help these business owners find the appropriate lending products to expand their establishments and succeed.”

Other findings:

– Approximately 7 percent of all minority-owned businesses are based out of the home, while more than 10 percent of the general small-business population are home-based
– More than 31 percent of minority small-business owners are women
– Nearly 45 percent of all minority-owned small businesses come from three states: California (23.4 percent), Florida (11.4 percent) and Texas (10.1 percent)
– Minority small-business owners have an average outstanding business balance of $8,759, while the general small-business owner population has an average outstanding balance of $9,066

Resources for business owners

Understanding and monitoring their business credit profile to ensure it is in good standing is a critical step for small-business owners to gain access to financial capital and grow their establishments. With the insights that business credit reports provide, small-business owners can take the appropriate actions necessary to positively impact their business. Experian provides some helpful resources to help small-business owners gauge the health of their business, including: — an authoritative source for understanding and learning about the benefits of managing business credit. Visit
Experian Business Credit — a site that enables small-business owners to access a copy of their business credit report and helps them understand the impact maintaining a positive credit profile can have on a small business. Visit
Business Score Planner™ — an education tool for business owners to understand how financial plans and changes to commercial credit information can impact a business credit score. Visit
The analysis is based on a statistically relevant sampling of data from Experian’s consumer and business credit database from December 2015. Average scores are an average of the sample and are not representative of national consumer or small-business averages. Ethnic background was obtained from Ethnic Technologies, a provider of multicultural marketing data, ethnic identification software and ethnic data appending services.