This study investigated the lending practices of the United States Small Business Administration. Specifically, the purpose of this research was to investigate the contention that Korean American applicants for SBA loans receive preferential consideration by the agency in relation to African American applicants for such loans.
Six research questions were investigated in this study. These research questions were as follows:
1. Does the approval rate in the award of SBA loans vary between African American applicants and Korean American applicants?
2. Are there factors other than racial or ethnic bias that explain any variation in approval rates in the award of SBA loans to African American applicants and Korean American applicants?
3. Does the mean loan amount of SBA loans vary between African American loan recipients and Korean American loan recipients?
4. Are there factors other than racial or ethnic bias that explain any variation in the mean loan amount of SBA loans to African American applicants and Korean American applicants?
5. Does the total loan amount of SBA loans vary between African American loan recipients and Korean American loan recipients?
6. Are there factors other than racial or ethnic bias that explain any variation in the total loan amount of SBA loans to African American applicants and Korean American applicants? Based on the findings of the research performed for this current study, a conclusion was drawn that racial and ethnic bias does explain some of the outcomes of SBA lending practices in relation to African Americans and Korean Americans. Racial and ethnic bias, however, was not the only factor involved in different outcomes for the two population groups. Thus, it was also concluded that the SBA is making an honest effort to improve access to financing for African Americans.
The findings and conclusions of this study imply that inequities exist between minority population grou...