This paper provides evidence on ethnic differences in bank debtfinancing among small Swedish firms at the start-up stage. The empiricalanalysis is carried out on a sample of small firms consisting of 2,814native- and immigrant-owned firms for year 2008. The method of binarylogistic regression analysis was mainly performed to analyse the data. Theempirical results suggest that immigrant-owned firms tend to use less bank debtthan their native counterparts. Moreover, the variables related to human capital,previous experience of starting a business, university education and anadditional job beside the business have a positive impact on the use of bankdebt. There is also a positive influence of personal start capital and the size offirm in terms of number of employees on access to debt capital. However, firmcharacteristics, legal form and industry affiliation affect the debt fundingnegatively, indicating that firms with less formalised legal status operating inless developed market segments and with less physical capital are less likely tohave access to debt capital.