Minority Small Businesses Pack Summit for Loan Help

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MOUNTAIN VIEW, Calif. - More than 1,000 people packed the conference hall at Microsoft’s Silicon Valley campus last week for a summit that brought together Asian-American small business owners, entrepreneurs, policymakers and high-profile federal officials.

The summit, organized by the White House Initiative on Asian Americans and Pacific Islanders, was part of an effort to reach out to minority-owned small businesses at a time when the Obama administration has been blamed for a “jobless recovery.”

Small businesses are the main job-creation engine in the country.

Gia Ly, incoming publisher of the monthly Vietnamese-American magazine Van Hoa, drove all the way from Orange County to attend the summit. Despite the tough economy, Ly says she wants to grow her business and attended the summit to find out how to tap into capital to expand. She also plans to bring the information back to her community, in her leadership role in the Vietnamese-American Chamber of Commerce.

"The Vietnamese community is a young community, so we definitely need all types of assistance - taxes, financing small loans, especially technical assistance. That [technical assistance] is very important because right now, the majority of Vietnamese businesses are still considered family-run, mom and pop stores,” Ly said.

During the summit, U.S. Secretary of Commerce Gary Locke highlighted the important role Asian Americans and Pacific Islanders play in the small business sector, noting there are over 1million AAPI-owned firms in the country, generating more than $300 billion in sales and employing half of all workers at minority-owned small businesses.

But officials with the president’s task forces on Asian Americans and Pacific Islanders acknowledged that more needs to be done to address ethnic small business owners’ access to loans.

A 2009 investigation by New America Media found that only a fraction of the loans given by the Small Business Administration (SBA), through a specific program funded with stimulus dollars, were granted to minority-owned small businesses.

According to NAM’s anaylsis of SBA data, of the 4,497 ARC (America’s Recovery Capital) loans where the race of the borrower was reported, more than 91 percent went to white-owned firms, three percent to Hispanic-owned businesses, three percent to Asian- or Pacific Islander-owned businesses, and only 1.5 percent went to black-owned firms.

Minority-owned businesses also face hurdles in access to private-sector loans.

A recent report by the California Reinvestment Coalition found that bank lending to California small businesses dropped by 70 percent between 2007 and 2009. The numbers were even more dismal for Latino and black-owned businesses. During the same time period, the number of loans backed by the Small Business Administration dropped by 81 percent for African-American-owned businesses and 84 percent for Latino-owned businesses.

Jonathan Swain, a spokesperson for the Small Business Administration, says the agency acknowledges this gap, but that “the SBA had to make sure that these small businesses could prove they could pay back the loans because they are borrowed from our taxpayers, and it is their money on the line if these loans fail.”

Swain says that aside from the ARC program, the SBA provided small business loans through other pots of money, noting that of the more than 90,000 loans totaling $42 billion given out by the SBA to small businesses from February 2009 until December 2010, about 11 percent went to AAPI-owned firms.

Ginger Lew, Small Business Advisor to the White House National Economic Council, says the agency is currently evaluating how the ARC program performed, including how to improve access to SBA loans for minority-owned small businesses. Lew added that the SBA recently launched two new loan initiatives - Small Loan Advantage and Community Advantage - with funding available starting March 15. She encouraged minority small business owners to apply for the programs.

But Asian-American entrepreneurs face other challenges.

Congressman Mike Honda, chair of the Congressional Asian Pacific American Caucus, noted that AAPI small business owners are more likely to “use personal family savings to start their business, and … face linguistic and cultural challenges when it comes to accessing federal programs.”

Federal officials hoped the Silicon Valley summit would help inform these business owners and entrepreneurs about some of the resources and opportunities available to them through the Small Business Administration and government agencies.

Leslie Yuen, executive director of the Hua Yuan Science and Technology Association, with about 5,000 Chinese members based in Silicon Valley, said the main reason he attended the event was to get information about federal programs.

Manufou Liaiga Anoai of SF SAMOA and Samoan Parents In Action said the biggest obstacles for small business owners in her community are access to capital and bad credit rating. Anoai said she has the following message for her fellow business owners about accessing federal loans: “You are qualified for them -- you’re actually more qualified than you thought you were.”

Lew of the Small Business Administration encouraged entrepreneurs who want to learn more about federal or state procurement to take one of classes available nationwide through SBA’s partner SCORE [http://www.score.org/index.html], a non-profit association dedicated to educating and mentoring entrepreneurs. The government website FedBizOpps.gov [https://www.fbo.gov/] also contains federal business opportunities for small business owners.

Odette Keeley is host and executive producer of “New America Now”, NAM’s TV show, as well as anchor for NAM”s weekly segment on “Upside” - both airing on- Comcast Hometown Network CHN 104. Fernando Julian Perez Fiesco is head of the Video Dept. at Silicon Valley De-Bug. Cliff Parker is a senior video producer for NAM & Min Lee is a senior video producer for YO! Youth Outlook & NAM.

Photo Credit: Fernando Julian Perez Fiesco/ Silicon Valley De-Bug