Sources of Start Sources of Start- -up Capital up Capital up - PowerPoint PPT Presentation

Sources of Start Sources of Start- -up Capital up Capital up Capital Sources of Start Sources of Start up Capital for Post for Post- -1965 Asian 1965 Asian 1965 Asian for Post for Post 1965 Asian Immigrant Businesses Immigrant Businesses Immigrant Businesses Immigrant Businesses Pyong Gap Min Pyong Gap Min Department of Sociology Department of Sociology Queens College and the Graduate Center Queens College and the Graduate Center The City University of New York The City University of New York

Motivation for Study Motivation for Study I. Ivan Light, Ethnic Enterprise in America: Ethnic Enterprise in America: I. Ivan Light, Chinese, Japanese and Blacks in Business Chinese, Japanese and Blacks in Business and Welfare (1972) (1972) and Welfare � Communal Sources of Start � Communal Sources of Start- -up Capital for up Capital for the Earlier Chinese and Japanese the Earlier Chinese and Japanese Immigrants (Rotating Credit Associations) Immigrants (Rotating Credit Associations)

II. A Plethora of Research Emphasizing Ethnic II. A Plethora of Research Emphasizing Ethnic Sources of Start- -up Capital for Immigrant up Capital for Immigrant Sources of Start Businesses Businesses � Family/Kin and Ethnic Ties (Private � Family/Kin and Ethnic Ties (Private Loans), Rotating Credit Associations, and Loans), Rotating Credit Associations, and Business Associations Business Associations

III. Increasing Emphasis on Class Sources of III. Increasing Emphasis on Class Sources of Start- -up Capital for Immigrant and Minority up Capital for Immigrant and Minority Start Businesses since the Mid- -1980s 1980s Businesses since the Mid � Money Brought from the Home Country, � Money Brought from the Home Country, Money Saved in the U.S., and the Money Saved in the U.S., and the Importance of Professional Skills for Importance of Professional Skills for Professional Businesses Professional Businesses � Argument over Ethnic v. Class Sources of � Argument over Ethnic v. Class Sources of Start- -up Capital up Capital Start

IV. The Myth that Government Agencies and IV. The Myth that Government Agencies and Commercial Banks Favor Korean and Other Commercial Banks Favor Korean and Other Immigrants in Offering Loans for Start- -up up Immigrants in Offering Loans for Start Capital Capital � New Immigrants Usually Cannot Get � New Immigrants Usually Cannot Get Loans from Commercial Banks Loans from Commercial Banks

V. Data on Sources of Start- -up Capital from up Capital from V. Data on Sources of Start Studies of Post- -1965 Korean, Taiwanese, 1965 Korean, Taiwanese, Studies of Post and Japanese Immigrants and Japanese Immigrants � The Insignificance of Ethnic and Formal � The Insignificance of Ethnic and Formal Sources of Start- -up Capital and the up Capital and the Sources of Start Importance of Class Sources Importance of Class Sources

Table 1: Sources of Start- -up Capital for Korean Immigrant Businesses in up Capital for Korean Immigrant Businesses in Table 1: Sources of Start Atlanta (N=159) Atlanta (N=159) Proportion of source as part P Source of overall start-up capital % Source % Savings in the U.S. 100% 32 Savings in the U.S. 100% 32 50 50- -99 99 30 30 1- -49 49 15 1 15 Money Brought Money Brought 100% 100% 8 8 From Korea 50- -99 99 18 From Korea 50 18 1- -49 49 7 1 7 Money Borrowed 100% 6 Money Borrowed 100% 6 From Relatives From Relatives 50 50- -99 99 11 11 And Friends 1- -49 49 27 And Friends 1 27 Commercial Banks or Commercial Banks or 100% 100% 1 1 Government 50- -99 99 9 Government 50 9 1- -49 49 8 1 8 Rotating Credit 100% 1 Rotating Credit 100% 1 Associations Associations 50 50- -99 99 0 0 1- -49 49 2 1 2 Sources: Survey Conducted by the Presenter in 1982. See Pyong Gap Min, p Min, Ethnic Business Enterprise: Ethnic Business Enterprise: Sources: Survey Conducted by the Presenter in 1982. See Pyong Ga � � Korean Small Business in Atlanta Korean Small Business in Atlanta (Center for Migration Studies, 1988), p.80. (Center for Migration Studies, 1988), p.80.

Table 2: Sources of Start- -up Capital for Taiwanese Immigrants in up Capital for Taiwanese Immigrants in Table 2: Sources of Start Los Angeles (N=310) Los Angeles (N=310) No Loan to Start the Business 43% No Loan to Start the Business 43% Of those who received loan: Sources of Loan those who received loan: Sources of Loan Of Family Members 73% Family Members 73% Friends 17% Friends 17% Government 0% Government 0% Commercial Banks 6% Commercial Banks 6% Others 10% Others 10% Sources: Survey Conducted in 1992 by Yen- -Fen Tseng; Her Articles in Fen Tseng; Her Articles in International Migration Review International Migration Review 29 (1995): 46. 29 (1995): 46. Sources: Survey Conducted in 1992 by Yen

Table 3: Sources of Start- -Up Capital for Japanese Immigrant Businesses in Up Capital for Japanese Immigrant Businesses in Table 3: Sources of Start New York (N=194) New York (N=194) Source % Source % Savings in the U.S. 69 Savings in the U.S. 69 Loan from Kin 26 Loan from Kin 26 Loan from Friend 24 Loan from Friend 24 Money Brought from 23 Money Brought from 23 Homeland Homeland Loan from Bank 24 Loan from Bank 24 Rotating Credit Associations 0 Rotating Credit Associations 0 Sources: Survey Conducted by Akiko Hosler in 1993. See Akiko Hosler, ler, Japanese Immigrant Entrepreneurship in New York City Japanese Immigrant Entrepreneurship in New York City (Garland, 1998: 97) (Garland, 1998: 97) Sources: Survey Conducted by Akiko Hosler in 1993. See Akiko Hos

Summary Summary � New Asian immigrants need commercial loans � New Asian immigrants need commercial loans from American banks but have difficulty having from American banks but have difficulty having access to them. access to them. � Many of them have recently turned to � Many of them have recently turned to homeland/ethnic banks and (former) owners’ ’ homeland/ethnic banks and (former) owners financing because of no language barrier and financing because of no language barrier and simpler credit checks involved. simpler credit checks involved. � American banks need to take special measures to � American banks need to take special measures to reach out to new immigrants who plan to start reach out to new immigrants who plan to start small businesses. small businesses.