All Articles Tagged "minority owned business"
A new study confirms what many women- and minority-owned businesses had learned to cope with ages ago — they operate on less financing. Non-technology businesses owned by African Americans, Latinos, and women simply work with less capital, says a report issued by the U.S. Small Business Administration (SBA) Office of Advocacy. Called the Access to Capital among Young Firms, Minority-owned Firms, Women-owned Firms, and High-tech Firms, the report examines how the changing financial environment affects new firms.
The study’s author, Alicia Robb, finds that minority firms in particular rely more on their own funds and have less capital to start up and develop. In fact, African American and Latino owners of young firms are less likely than others with similar credit scores to have access to bank financing. “During the financial crisis, women and minority owners of new startups were less likely to apply for credit, fearing loan denial,” according to a SBA press release.
“We know that startup businesses with access to financing drive innovation, job creation, and economic growth,” said Dr. Winslow Sargeant, Chief Counsel for Advocacy. “Policies that help close the financing gaps for minorities and women and for high-tech startups will benefit the whole economy.”
According to Forbes, recession or not minority business enterprises (MBEs) always have a problem funding funding. “MBEs rely more heavily on financial institutions for loans than all other borrowing sources combined. However, when compared to white-owned firms, MBEs typically encounter higher borrowing costs, receive smaller loans and see their loan applications rejected more often,” reports the magazine. “Black- and Latino-owned MBEs are the most likely to experience such negative results.”
The U.S. Small Business Administration has teamed up with the U.S. Black Chamber to help minority-owned small businesses gain access to opportunities that will lead to federal contracts. That includes networking with larger businesses and in-person meetings.
“During several scheduled forums, small businesses will learn how to market themselves to the federal government and go after federal contracting opportunities,” reports Black Enterprise. “The forum also will offer help with strategic alliances, joint venture opportunities, and mentor-protege arrangements within the [SBA’s 8(a) Business Development program].”
The two organizations kicked off their partnership with an event on October 10 at the Carnegie Library in Washington DC, the National 8(a) Training, Business Matchmaking and Awards Ceremony.
(St. Louis American) — Federal spending with Small Disadvantaged Businesses (which includes small minority-owned businesses) was up for Fiscal Year 2010, with $34.39 billion (7.95 percent of federal contracts) for 2010 over $33.48 billion (7.57 percent) for FY 2009.
(Chicago Tribune) — A city agency that oversees hundreds of millions of dollars worth of construction projects “grossly overstated” the amount it paid certified minority contractors in 2009, according to a report issued Wednesday by the city’s top internal watchdog. The Public Building Commission reported paying $89 million to certified minority-owned businesses two years ago, but a review of actual payments and certifications indicates those payments were overstated by nearly 40 percent, the report concludes. Inspector General Joseph Ferguson also found that the commission overestimated payments of $16.1 million to certified women-owned businesses by 3 percent. And he alleged that the commission was not complying with its responsibility to allow him to probe all projects involving city money.
(Wall Street Journal) — There are more Hispanic-owned businesses than Asian-owned businesses. Likewise, there are more black-owned businesses than Asian-owned businesses. But the total sales at Asian-owned businesses exceeds the combined sales at black-owned and Hispanic-owned businesses. Last week, the U.S. Census Bureau released a detailed report on the growth of businesses owned by people of Asian origin between 2002 and 2007 – an analysis that is conducted every five years. In that time, the number of Asian-owned firms increased more than 40% to 1.5 million, while the sales at those businesses hit $507.6 billion.
(The Pilot) — The “GWG” in GWG Wig Boutique in downtown Southern Pines stands for Gail Withers George and, she adds, “Go with God.” Gail has gone many places with God. In fact, the fashionista retailer with a brilliant smile owns a CV that reads like an African-American history timeline, beginning with her grandmother’s domestic employment and culminating in Winston-Salem’s Best Small Business award in 1993. That business, Temp Options, placed ex-convicts in construction jobs. When one didn’t show, Gail put on jeans and boots, reported to the work site at Baptist Hospital, donned a hard hat and demolished bathrooms.
“I love being an entrepreneur,” George says. She also loves independence. All of Gail’s businesses were opened with her own savings, not bank or other financing. Gail, an only child, was born in Salisbury but moved around. Her father was in the Air Force, and her mother worked for Honeywell. Gail calls her grandmother’s domestic employment a self-owned enterprise. As a student she held a variety of summer jobs, discovering that “you can’t make money working for $1.25 an hour.” Gail studied speech pathology at Boston College but itched to get out on her own.
Sean “Diddy” Combs has become quite the businessman. What started out in 1993 as a record company that was home to hip-hop and R&B artists such as The Notorious B.I.G., Faith Evans and Craig Mack has grown into a worldwide conglomerate that was recently selected by Crain’s New York Business as the third largest minority-owned business in New York City.
According to Crain’s, for a business to qualify, it must be privately owned and headquartered within the New York area. The New York area includes New York City and Nassau, Suffolk and Westchester counties in New York, as well as Bergen, Essex, Hudson and Union counties in New Jersey. The business must also be at least 51 percent owned by minorities.
Bad Boy Worldwide Entertainment Group is responsible for managing artists, recording music, fragrances, restaurants, apparel, advertising, marketing, TV and film production. Bad Boy rakes in an estimated $300 million annually and has an estimated 600 employees on its payroll.
Bad Boy falls behind Palladium Equity Partners, a private equity company that landed the number two spot and pulled in $1.2 billion in revenue in 2009. Goya Foods Inc., the Hispanic-owned food company, took the number one position and generated $1.5 billion in revenue in 2009.
(The Business Review) — Using a downtown Buffalo coffee shop that’s owned by an African-American woman, New York Gov. David Paterson signed a new bill into law that encourages more investment in minority and women-owned businesses across the state. The bill, championed by Assemblywoman Crystal Peoples-Stokes, D-Buffalo, now ensures that minority and women-owned businesses will have an equal shot at bidding on state contracts. The law actually was signed by Paterson in June, but he came to the 2nd Cup coffee shop Buffalo in what may be his final local stop before leaving office next month, for a ceremonial “signing” on Peoples-Stokes’ home turf.
(Small Business Trends) — The Census Bureau recently trumpeted news about growth in Black and women-owned businesses. With the press release bearing the headline of “Census Bureau Reports Minority Business Ownership Increasing at More Than Twice the National Rate,” the Census’s Press Office gave the impression that the 2007 Survey of Business Owners unearthed a boom in minority entrepreneurship. The press release explained that the number of “black-owned businesses in 2007 [was] up 60.5 percent from 2002….The number of white-owned businesses increased by 13.6 percent…. The number of women-owned businesses … [was] up 20.1 percent from 2002. By comparison, men-owned businesses … [were] up 5.5 percent from 2002.” By comparing White and Black entrepreneurs and male and female ones, the Census Bureau gave the impression that Black and female entrepreneurs did better than White, male ones between 2002 and 2007.
(The Network Journal) — The news is good—and bad—for minority business. According to a recent report issued by the U.S. Commerce Department’s Minority Business Development Agency (MBDA) and the U.S. Census Bureau, the number of minority-owned firms increased by 46 percent to 5.8 million between 2002 and 2007. But while the numbers have increased, the “economic parity remains elusive,” said MBDA’s National Director David A. Hinson in a press statement.