With Census Bureau estimates showing that Black/African-Americans and Hispanic/Latinos now make up 13.4% and 18.5% of the population respectively, the very face of business ownership in the United States is changing.
The Senate Committee on Small Business & Entrepreneurship points out that over the last 10 years minority businesses have;
Accounted for 50% of the 2 million new business started
Created 4.7 million jobs
Achieved annual sales of nearly $700 billion
But, they note, “despite that growth, there is still a disparity when it comes to access to capital, contracting opportunities and other entrepreneurial development opportunities for minority-owned firms”.
A recent study of 150,000 small businesses by J.P. Morgan Chase uncovered some sobering facts about that disparity, including:
Black- and Hispanic-owned businesses are well-represented among firms that grow organically but underrepresented among firms with external financing
Black- and Hispanic-owned businesses face challenges of lower revenues, profit margins, and cash liquidity
Firms with Black owners, particularly owners under the age of 35, were the most likely to exit in the first three years
Brookings echoed similar sentiments in their own report on Black-owned businesses specifically, adding:
Black-owned businesses start with approximately 1/3rd less capital than their white peers
Black-owned businesses have difficulties raising private investments from mainstream investment systems
The first round of the Paycheck Protection Program is a recent example of the hurdles that minority-owned small businesses encounter, with Forbes, Brookings, and CBS News all highlighting the disparity in access to funds from the program.
In order to make sure Black- and Hispanic-owned business not only survive these challenging times but are ultimately able to compete fairly in the future, it’s critical that they have access to funding and liquidity options as well as the other resources they need to grow like education, networking, and guidance.
Here we highlight six organizations focused on just that:
Housed within the U.S. Department of Commerce and established in 1969, the Minority Business Development Agency (MBDA) is “the only federal agency solely dedicated to the growth and global competitiveness of minority business enterprises”.
MBDA helps businesses in all sectors of the economy in and 2019, their 50th anniversary year, they awarded the National Association of Investment Companies, the largest network of diverse-owned private equity firms and hedge funds, a grant to aggregate and deploy “approximately $1 billion in growth capital into minority-owned businesses”.
Based in New York City and founded in 1972, the National Minority Business Council (NMBC) provides resources in the form of assistance, education, seminars, purchasing listings, and other business services to minority-owned businesses both locally in the tri-state area and nationally.
“The strength of the organization resides in its members of successful entrepreneurs who are committed to their business and to the NMBC’s continuing goal of expanding opportunities available to small, minority and women business owners.”
The U.S. Black Chambers (USBC) serves as something of an umbrella organization, supporting the work of the nearly 140 African American Chambers of Commerce around the country. Their mission of “visionary leadership and advocacy in the realization of economic empowerment” includes access to capital, contracting, entrepreneur training, and chamber development.
The U.S. Hispanic Chamber of Commerce (USHCC) makes its mission to nurture Hispanic economic development and promote “the economic growth, development, and interests of more than 4.7 million Hispanic-owned businesses”.
Similar to the U.S Black Chambers, they also serve as an umbrella organization to more than 200 local Chambers of Commerce and function as a direct gateway to more than 260 corporate partners and Hispanic Business Enterprises.
Functioning as a conduit between minority business enterprises (MBEs) and companies that need products, services, and solutions, the National Minority Supplier Development Council (NMSDC) works to “support and facilitate MBE integration into corporate and public-sector supply chains”.
Also serving as certifying body for MBEs, they help match their 12,000 certified minority-owned business with 1,450 corporate members that include “many of the largest public and privately-owned companies, as well healthcare companies, colleges, and universities”.
With the aim of “strengthening the United States by improving the lives of Latinos”, the Latin Business Action Network (LBAN) empowers Hispanic “entrepreneurs to grow their businesses through research, education and national ecosystem development”.
They’ve also set ambitious goals of doubling the number of $ 10+ million, $100+ million, $1+ billion Latino-owned businesses in the U.S.by 2025.
LBAN collaborates with Stanford University to champion the Stanford Latino Entrepreneurship Initiative (SLEI).
Black- and Hispanic-owned businesses play an important role both locally and nationally. We’re committed to making capital accessible to all small business owners. Know of resources we should add to this list? Email us and let us know!
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