November 19, 2008
Minority Entrepreneurs Hope for a Stronger SBA
Small and minority-owned business entrepreneurs have felt neglected these past eight years. The Small Business Administration, which is charged with serving their needs, has experienced budget cuts and constant turnover in personnel, including three different administrators.
And, despite numerous claims by the Bush administration that small businesses are a primary source of job creation in the United States, the president downgraded the administrator’s role from a cabinet level position almost immediately after taking office.
Now, with increased Democratic majorities in both chambers of Congress and a Democratic president, these entrepreneurs have reason to hope things will change. But with so much focus on bailing out Wall Street, financial institutions, and the auto industry, will they continue to be overlooked?
“These are tough times for everyone, but any concentration on SBA programs would be well-received by minority business. In many instances they’ve felt that SBA has become somewhat irrelevant to their everyday business needs, whether it be the loan program or monitoring contracts at other federal agencies so they don’t get into the hands of big business,â€ says James Ballentine, director of housing and community development for the American Bankers Association.
“SBA’s supposed to be the cop on the beat for small business, and for it to have faced a nearly 40% to 45% budget cut is an indication of what the agency is doing for small business. The administrator no longer has a seat at the big table. I haven’t heard whether President-elect Obama’s going to make that a priority, but it would indicate that the agency is deemed important,â€ adds Ballentine, who has served as an SBA associate deputy administrator for government contracting and business development.
Anthony Robinson, who heads the Minority Business Enterprise Legal Defense and Education Fund, believes that the basic enforcement of existing laws would go a long way toward assisting small business.
“We have laws on the books that mandate minority business participation, yet they’re not being enforced across the board,â€ Robinson says.
One example he cites is the subcontracting program, which requires that contracts above a given dollar value include small and minority business subcontractors. Too often when large corporations win such contracts, they don’t actually use the subcontractors they used to win the work and are not penalized.
Melvin Forbes, president and CEO of Wilkerson Sports Enterprise and Forbes Consulting & Associates, says that many of his clients have experienced this problem.
He wants to see greater enforcement of the subcontracting process and penalties for those who break the rules. “I also believe that a special committee needs to be formed to look at antiquated SBA laws and regulations that have prohibited some small businesses from growing, such as limits on personal net worth,â€ he adds.
In addition, Robinson says that while an increased number of minority businesses have received 8(a) certification, a significant number of them are never awarded government contracts.
To increase minority business’ access to venture capital, he believes there must be a push to license more