A La Jolla economist will lead a national study into what barriers women and minority entrepreneurs may face in the earliest stages of applying for a business loan.
UC San Diego announced Sunday, Aug. 30, that the Ewing Marion Kauffman Foundation awarded more than $1 million to the university's Rady School of Management for a multi-year research project on small business lending.
Sally Sadoff, professor of economics and strategy at the Rady School, will lead the work. Her team plans to use field experiments, surveys and interviews with entrepreneurs and lending professionals to examine whether business owners get consistent, timely responses when they first contact banks and other lenders.
"Our goal is to gain a better understanding of how entrepreneurs engage with financial institutions at the beginning of the lending process, in an effort to find practical ways to improve those interactions for entrepreneurs from all backgrounds," Sadoff said in the university's announcement.
What the study targets
Gaps in loan approval rates for minority and female business owners have been widely studied. What remains less understood, according to the university, is what happens even earlier: whether some entrepreneurs face barriers just trying to get a lender's attention.
The scope is national. The project aims to pinpoint where the lending process breaks down and inform policymakers, lenders and business-support organizations.
The university described the effort as one of the most comprehensive examinations of early-stage small business lending interactions to date.
La Jolla connection
The Rady School of Management sits on the UC San Diego campus in La Jolla. Dean Lisa Ordóñez described the Kansas City-based Kauffman Foundation as a leader in entrepreneurship research and called the grant's potential to help entrepreneurs, lenders and communities "important work."
The grant announcement did not specify the exact dollar amount beyond "more than $1 million," nor did it name co-investigators or partner institutions. The university did not announce a timeline for the study's first findings.
Sadoff's team will conduct field experiments and interviews across the country over the coming years, with results expected to reach policymakers and financial institutions nationwide.
