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Sibylle Heilbrunn and Nonna Kushnirovich

The purpose of this chapter is to examine patterns of finance of ethnic minority-owned businesses and compare these patterns to those owned by ethnic majorities. Based on the disadvantage approach, we investigated four groups of entrepreneurs in Israel. Using a combination of convenience and snowball sampling, we reached 948 entrepreneurs who answered a comprehensive questionnaire. The patterns of financing businesses owned by minorities differ from those of majority entrepreneurs in terms of access to capital and constraints, sources of funding, scope of investment and financial viability. Overall, our findings indicate that stratification encounters entrepreneurship also in financing patterns. Within the Israeli context internal (education) and external (institutional) constraints lead to lower availability of financial resources, distributed and available along lines of the social hierarchy of the groups under investigation.