NEW YORK ( MainStreet) -- Along with Martin Luther King Jr.'s fight for social justice came goals of economic justice, and the famed civil rights leader would be pleased to learn that today black-owned small businesses are one of the fastest-growing segments in the small-business sector.
From 2002 to 2007, the number of black-owned businesses rose by 60%, to 1.9 million -- more than tripling the national rate of 18% to become approximately 7% of all small businesses, according to the most recent data available by the U.S. Census Bureau's Survey of Business Owners.
In 2007, nearly four in 10 black-owned businesses operated in health care and social assistance as well as in the repair, maintenance, personal and laundry services sectors.Black-owned businesses, like the rest, took a hit as a result of the recession. But while obtaining capital is still hard for all small businesses, blacks have an even tougher time gaining financing. Data from 2009 research by the Kauffman Foundation reveal "dramatic" differences in the capital injections of black-owned start-ups compared with white-owned new businesses. The median personal wealth for whites is 11 times higher than that of blacks, according to the survey, which cited census data. Since personal savings are typically used as collateral or to be invested directly into the business, "low levels of black personal wealth may be detrimental to securing capital," the research found, adding that black-owned start-ups "experience higher loan denial probabilities, pay higher interest rates than white-owned businesses and have low levels of start-up capital." The survey tracked nearly 5,000 businesses founded in 2004 over their early years of operation. "Having less access to capital not just at start-up, but also in subsequent years, could have a detrimental effect on black-owned firms' long-term performance," says Robert Litan, vice president of Research and Policy at the foundation. "Anything that you deal with in business ... is exacerbated for the minority community," says Daryl Williams, CEO of the Urban Entrepreneur Partnership, a Kauffman affiliate. "If there is a lack of access to capital for general population, it's exponentially higher for the minority population." As we celebrate King and his work, it's good to know there are plenty of black entrepreneurs who have bucked the trend. Here are five business owners who had a dream and made it come true: