Revised City of South Bend Disparity Study Report

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City of South Bend Disoarity Study 2020 rates for business loans; minority-owned firms receive smaller equity investments than non -minority owned firms even when controlling for detailed business and owner characteristics; and minority entrepreneurs face challenges (including lower family wealth and difficulty penetrating financial markets and networks) directly related to race that limit their ability to secure financing for their businesses. • Results from the Federal Reserve Board's Small Business Credit Surveys form 2016 and 2018. These Surveys found significant barriers to minority and woman -owned firms seeking commercial credit, especially for Black - owned firms. For example, Black -owned firm application rates for new funding were 10 percentage points higher than White -owned firms but their approval rates were 19 percentage points lower. Further, Black - owned firms were nearly twice as likely to be turned down completely compared to White -owned businesses. • The literature on barriers to access to the development of human capital. This research reports that minorities continue to face constraints on their entrepreneurial success based on race. These constraints negatively impact the ability of firms to form, to grow, and to succeed. These types of evidence have been found by the courts to be relevant and pro- bative of whether a government will be a passive participant in overall market- place discrimination without some type of affirmative intervention. Taken together with anecdotal data, this is the type of proof that addresses whether, in the absence of M/WBE contract goals, the City will be a passive participant in the discriminatory systems found throughout its industry market. These economy -wide analyses are relevant and probative to whether the City may employ narrowly tailored race- and gender -conscious measures to ensure equal opportunities to access its contracts and associated subcontracts. 4. Qualitative Evidence of Race and Gender Barriers in the City's Market In addition to quantitative data, the courts look to anecdotal evidence of firms' marketplace experiences to evaluate whether the effects of current or past discrimination continue to impede opportunities for M/WBEs such that race - conscious measures by the agency are supportable. To explore this type of anecdotal evidence, we received input from 110 partic- ipants. Many minority and woman owners reported that they continue to encounter discriminatory attitudes, stereotypes and negative perceptions of their qualifications, professionalism and/or capabilities. While sometimes sub- tle, these biases about minorities' and women's lack of competence infect all aspects of their attempts to obtain contracts and to be treated equally in per - 10 © 2020 Colette Holt & Associates, All Rights Reserved.