Q&A: Commerce Secretary Gary Locke

Commerce secretary discusses the recovery and minority participation

Dingle: But are you concerned that, at this point, looking at through August 14th, that guaranteed loans are down 43% from last year? Isn’t that a concern, especially with what the government has put in place to make the guaranteed loans more accessible and more palatable?

Locke: Well, what we’re trying to do is we know that with the tough economic times that a lot of companies are facing, they are not taking advantage of these. Earlier in the year we saw a lot of banks just not offering loans to anybody. Even if it was almost a 100% guarantee they just weren’t offering loans because they didn’t have any money to give out, and it’s still up to them to give up the money even though we might guarantee the loan and the repayment of the loan down the road. There was so much scrutiny on the banks that they weren’t giving out loans, even to their most trusted, longtime customers. But now we are seeing the banks starting to free up money and by us raising, the federal government raising the guarantee behind these loans, we’re seeing a lot more receptivity and a lot more action. But nonetheless, this is something the President is very much committed to, very much focused on, because we know how tough it is. Because companies, minority firms are still having to pay their monthly bills and pay their expenses. At the same time they are not getting timely payment for products delivered or for services rendered. So they are really facing a cash flow crunch and that’s where access to capital, even short-term loans can be very, very important.

Dingle: That’s the challenge. On the one hand we say get prepared for these emerging industries, become innovative, embrace them, and right now so many firms are dealing with survival. How do you reconcile those two issues? How do you keep companies going while focusing on the emerging industries of tomorrow?

Locke: Well, it’s actually a combination of both. We need to focus on making sure minority firms stay strong, viable, are able to survive because so many companies, especially small companies, are not able to survive in this tough economic recession. So many of the job losses that we have seen in the year 2008 and part of early 2009 have occurred among those small businesses, and we know so many of them are minority owned businesses.

So we’ve got to help them and that’s why the president is really focused on, through the Recovery Act, providing funds, guaranteed loans, even outright grants for small to medium-sized businesses. And especially grants and loans in the emerging fields. And I want to say if you’re a minority firm and you are able to hang on and survive, start thinking about these emerging industries. Be prepared to start diversifying your activities to get into these emerging industries, especially surrounding alternative energy and energy efficiency. This whole new green jobs, alternative energy, environmental energy efficiency really has very few players in it and what players there are are all new, so they don’t have a huge credit history themselves. Because it is relatively new everybody is on the same early-stage of development. They are not these companies that have been around for 20, 30, 40 years that have such a monopoly on it that it’s very difficult for others to enter into the field.

So what is the hallmark of many of our minority businesses is that they are aggressive. A lot of sweat involved, a lot of passion, a lot of hard work, a lot of ingenuity and creativity, those same skills and strengths that will help them move into these new emerging fields, especially in energy.

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