More than 60% of entrepreneurs under the age of 35 finance their business ventures with their own savings, according to a study by the Young Entrepreneurs Network.
"They feel intimidated by banks, and no bank has reached out to them," said Jennifer Kushell, president of the Boston-based trade group.
"There is a general feeling in the banking industry that young people aren't capable of running a business or even managing their finances," Ms. Kushell said.
Despite the negative perceptions, the typical small business owned by someone under 35 generates enough money to support the owner and several employees, the 1996 study of 200 entrepreneurs found.
Of the five million people who started businesses last year, 47% were under the age of 35 and 16% were younger than 25, Ms. Kushell said.
Few young entrepreneurs are raking in riches; their median income is between $30,000 to $45,000, the study found. Banks often focus on middle- aged entrepreneurs, such as executives who started their businesses after losing jobs with large corporations, because they tend to have more personal wealth.
Eighty-seven percent of young entrepreneurs surveyed started their business from scratch. Just 6.5% bought a business or franchise, and 4% inherited a family-owned business.
Ms. Kushell said young entrepreneurs tend to create their own business from scratch because they are not familiar with such alternatives.
Even among the entrepreneurs who founded their own businesses, family background played an important role. Sixty-two percent of the small- business owners surveyed said there is at least one other entrepreneur in the immediate family.
