Banks in Illinois are more likely to lend to white-owned small businesses as opposed to their minority counterparts — to the tune of hundreds of millions of dollars. That’s according to a report released Tuesday by the Woodstock Institute, a social justice and research think tank.
The report found if the disparity between white and non-white communities could be equalized in Illinois, the minority tracts would have gotten 19,000 more loans amounting to $460 million.
Lauren Nolan is a co-author of the report.
“Businesses, of course, need access to capital and access to lending to grow, to expand, to manage cash flow, and to purchase needed equipment, and financing,” Nolan said. “The small businesses provide entrepreneurship opportunities and create jobs and of course without access to capital and the ability to grow, that hinders our ability to create jobs.”
The report covered a three-year period and was funded by the First Midwest Bank and Midland State Bank.
Brent Adams, another co-author, said their findings warrant a federal investigation into racial inequity in small-business lending.
“In airports and train stations we are told, if you see something, say something," Adams said. "This is similar. We saw something and we’re saying something and now the appropriate authorities have the responsibility to investigate to figure out exactly what’s going on here and institute measures to fix it.”
Read the full report here.