Citation URL: http://www.urban.org/KerstinGentsch

Financial assistance from family and friends is an important resource for lower-income families dealing with difficult economic circumstances. This fact examines what percent of respondents in low-income neighborhoods gave financial help, either to family and friends or to other people they live with, in the last 12 months. The percentage of respondents who gave financial help is high 39 percent, with substantial variation within immigrant and U.S.-born respondent groups by race and ethnicity in the proportion that gave and where the assistance was sent

In the second fact we examine what percent of respondents in low-income neighborhoods received financial help in the last 12 months from families and friends or from other people they live with. Overall, 25 percent of respondents received financial help from families and friends. This figure differs substantially by nativity. Moreover, the patterns of receiving help from family and friends are fairly similar across race and ethnic groups for U.S.-born respondents, whereas the percent of immigrant respondents who received help from family and friends differed sizably among region of origin.

How households cope with financial emergencies depends largely on the resources at their disposal. Differential access to good financial options affects how much households pay for credit in a time of need, which can vary substantially. Using data from the Making Connections Cross-Site Survey (2002–2004), we examine how households with incomes over $30,000 and those with incomes below $30,000 would respond in a financial emergency and find that in general, higher-income households were more likely to use conventional methods while lower-income households were more likely to use alternative (and often more expensive) methods to pay unexpected bills.

The SBIC program provides venture capital and mezzanine finance to start-up and expanding small businesses through SBICs, and is intended to fill the gap in smaller debt/equity financings, and to expand the reach of venture capital into underserved urban and rural markets. We find that debenture SBIC investments varied substantially from comparable private venture capital. Total financings by SBICs are much less likely to be in high-tech industries than those made by venture capital firms, are more dispersed regionally, and appear more likely to be in low- and moderate-income areas.

This study analyzes the extent to which the SBA's 7(a) and 504 programs serve borrowers facing capital gaps. Comparative and market share analyses show that women-, minority-owned, and start-up firms accounted for a higher share of the loans and larger share of lending volume under the 7(a) and 504 Programs compared to such firms' share of conventional small business loans. 7(a) and 504 loans went to firms that, on average, had lower sales and fewer employees than firms that received conventional small business loans. These differences suggest that SBA’s 7(a) and 504 Programs served borrowers who face a capital gap.

The paper explores the financial well-being and economic integration of immigrant groups compared with native-born minorities and whites in vulnerable urban neighborhoods. Among the main findings from the analysis is that immigrants and native minorities in the neighborhoods we examine face similar types of economic difficulties. However, after controlling for citizenship, English proficiency, educational attainment, and having a driver’s license and a reliable car, many of the economic disadvantages disappear for immigrant groups, but not for native-born minorities. These findings suggest that even in tough neighborhoods, the potential for economic integration of immigrants is strong.

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