A Look at Financial and Demographic Characteristics of Small-Business Owners by Political Party
With the presidential election less than a year away, Experian®, the leading global information services company, looked at the financial and demographic characteristics of small-business owners by political affiliation. According to the analysis, Republicans make up the largest percentage of the small-business owner population in the United States. Approximately 35 percent of all small-business owners identify as Republican, while 29.4 percent identify as Democrat and 15.8 percent identify as Independent.
“Small businesses are a major area of interest for a number of political campaigns — and justifiably so, given their positive impact on employment rates and importance to local economies,” said Pete Bolin, director of consulting and analytics for Experian Business Information Services. “Gaining insight into the characteristics of specific segments of the small-business owner population enables government officials, lenders and business professionals to better understand them and take appropriate action to help these small firms grow.”
As part of the analysis, Experian examined the credit and payment behavior of small-business owners who identify as Republican, Democrat or Independent. Findings show that those who identify as Republican have the highest average business loan balances and the second-highest consumer loan balances at $9,823 and $193,483, respectively. Meanwhile, Democrats have the lowest average business ($7,540) and consumer ($172,653) loan balances. Furthermore, Republican small-business owners demonstrated good payment behavior, with the lowest delinquency rates (91-plus days) for commercial and consumer credit cards at 0.98 percent and 5.8 percent, respectively. They were followed by Independents and Democrats.
“Understanding how to establish and build commercial credit is an integral component of a small business’s success,” continued Bolin. “We always recommend that business owners separate their personal credit from their business credit to protect themselves in case one falters due to unforeseen circumstances. As we review the analysis, Republicans have demonstrated a successful ability not only to leverage their business credit for business purposes, but also to pay their bills in a timely manner.”
While the percentage of small-business owners who identify as Republican is far greater than those who identify as Independent, there are a number of similarities between the two parties. The difference in average personal income between Republican and Independent small-business owners is less than $100. On average, Republican small-business owners make $97,481, while Independents make $97,386. On the other end of the political spectrum, the average personal income for Democrats is $86,574.
From an industry perspective, all three political parties are very similar. The top five industries for each party are:
|Single-family housing construction||Eating places||Eating places|
|Eating places||Beauty shops||Single-family housing construction|
|Business services||Business services||Business services|
|Real estate||Single-family housing construction||Beauty shops|
|Beauty shops||Real estate||Real estate|
“Considering how closely aligned Independents and Republicans are on so many of their political views, it makes sense that the characteristics of small-business owners who identify with each party would be so similar,” continued Bolin.
Additionally, the analysis found that 73.2 percent of small-business owners who identify as Independent have some college experience and 45 percent have at least a bachelor’s degree. Republicans have similar percentages, with 72.3 percent enrolled in college and 44.1 percent who have earned a bachelor’s degree, while 66 percent of Democrats have college experience and 39.4 percent have a bachelor’s degree. In addition, Independents have the highest average student loan balances at $40,884, followed by Republicans at $39,944 and Democrats at $39,274.
Other findings include:
- Republican small-business owners have the highest commercial credit score at 58, followed by Independents (56) and Democrats (55)
- More than 41 percent of Republican small-business owners established their business within their homes, compared with 29.1 percent of Democrats and 13.4 percent of Independents
- Nearly 77 percent of Republican small-business owners are married, while the same can be said of only 69 percent of Independents and 64.8 percent of Democrats
Complete findings from Experian’s analysis on the characteristics of small-business owners by political affiliation will be presented in a Webinar on Jan. 20, 2016, at 1 p.m. Eastern time. To register, visit http://bit.ly/1MRyDNC.
About Experian’s Business Information Services
Experian’s Business Information Services is a leader in providing data and predictive insights to organizations, helping them mitigate risk and improve profitability. The company’s business database provides comprehensive, third-party-verified information on virtually all U.S. companies, with the industry’s most extensive data on the broad spectrum of small and midsize businesses.
By leveraging state-of-the-art technology and superior data-compilation techniques, Experian provides market-leading tools that proactively support the entire credit life cycle, enabling our clients to find new customers, process new applications, manage customer relationships and collect on delinquent accounts.
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