Low-Wealth Minority Enterprises and Access to Financial Resources for Start-Up Activities

The role new start-ups may play in the economic recovery has been thrust into the political limelight, with a number of policy makers and advocates calling for network interventions to stimulate and foster an environment conducive to their growth and development. However, the design and implementation of these policies may have differential effects for low-wealth minority enterprises. In this article, the author draws on social resource theory to conceptualize the effects of social networks on access to financial resources. The findings suggest that disparities do exist among low-wealth minority enterprises in the amount of social resources they possess as well as in the formal financial resources obtained. Low-wealth minority enterprises that do obtain a higher level of formal financial resources have upward connections to those that possess greater social resources. The research has implications for the design and implementation of policies geared toward low-wealth minority entrepreneurs.