A New Agenda for Small Business?
No segment of American industry has been pummeled by the Great Recession more than minority business. As the economy shows signs of recovery, these companies––most of which can be found in the small business sector––have been struggling to gain solid footing. Access to capital and government contracts, most assert, would stabilize their companies and eventually spur growth. Others need such lifelines to keep from joining the ranks of the more than 30,000 businesses forced to file for bankruptcy protection in the first half of 2009. Although the Obama administration has initiated small business financing programs––including freeing up more than $15 billion by increasing guarantees and lowering fees as part of the Small Business Administration’s 7(a) loan program––financial institutions, large and small, have still been reluctant to provide funding to entrepreneurs. For example, the SBA reported a 43% decline in 7(a) loan approvals from a year earlier. And critics maintain that the America’s Recovery Capital Loan Program that was part of the $787 billion stimulus program is operating at a clunker’s pace: Reports reveal that as of Sept. 1, only roughly $65 million––1,850 loans at a maximum funding level of $35,000––of the $255 million had been disbursed to small business owners. “Small firms are in such bad shape today that those who need loans are not likely to be able to qualify with respect to their credit worthiness,” says Thomas Boston, director of research and innovation of the Atlanta-based economic consulting firm EuQuant and a member of the black enterprise Board of Economists. “ What small firms need is revenue and procurement opportunities.”
Commerce Secretary Gary F. Locke is aware of such needs. In speeches to entrepreneurs, the 59-year-old former governor of Washington often recounts his Chinese immigrant father’s rise from servant to grocery store owner as well as his own track record in the statehouse of helping companies make international connections. President Obama has charged Commerce’s agencies to bolster small and minority-owned firms. Locke has assembled a high-powered team to tackle the job: Deputy Commerce Secretary Dennis Hightower, Commerce Deputy Chief of Staff Rick Wade, Small Business Administration head Karen Mills, and Minority Business Development Agency National Director David Hinson. Locke says their collective role is not only to help such companies survive and gain contracts available through the American Recovery and Reinvestment Act, but to reposition them to become players in “new economy industries” such as renewable energy. At MBDA’s recent Minority Enterprise Development Week conference, better known as MED Week, Locke talked with black enterprise’s Editor-in-Chief Derek T. Dingle about how Commerce will help minority firms participate in America’s economic rebound.
BLACK ENTERPRISE: Outline your agenda for minority business.
GARY LOCKE: It’s our view that the economic recovery will not be successful unless minority businesses also share in that recovery and are part of the turnaround and growth. It’s important for minority businesses to succeed if we want all of America to succeed. Minority businesses are such a large component of small- to medium-sized businesses in America now. In just the last four years they’ve grown from just a couple of hundred thousand to more than 4 million, employing millions and millions of Americans all across this country. SBA Administrator Karen Mills and I have been asked by the president and the vice president to help lead all of our cabinet activities to ensure that with all the stimulus money going out that minority firms are front and center in getting their fair share of those contracting opportunities. So in the next 90 days we’re going to have some 200 workshops and opportunities for minority businesses all across the country about the contracting opportunities.
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