Today, Sen. John Kerry [D-Mass.] urged the Bush Administration to take steps to expand access to capital and federal contracts for minority entrepreneurs.
Kerry, chairman of the Committee on Small Business and Entrepreneurship, chaired a hearing to highlight the barriers many minorities face as they seek to start or expand a business, and to discuss policy solutions to address these challenges. “One of our nation’s greatest assets is our diversity," he said. "Investing in minority businesses only helps to increase the value of that asset.
“For example, in Massachusetts, minorities make up about 15 percent of our population, but they own only about five percent of the businesses and account for just 1.4 percent of sales. We must do more to create opportunities for successful business growth, and remove the barriers for minority entrepreneurs.”
Over the last 10 years, minority business enterprises accounted for over 50 percent of the two million new businesses started in the United States, crossing every industrial sector -- from financial services and health care, to construction and transportation. Today, there are more than four million minority-owned companies in the country, with annual sales totaling $694 billion. There are nearly 50,000 minority-owned firms in Massachusetts.
According to the 2002 U.S. Census data, minorities make up 32 percent of our population, yet minority business ownership is only at 18 percent. In addition, these firms make significantly less than their non-minority counterparts. The average gross receipts of minority firms was $162,000 -- considerably lower than the $448,000 average gross receipts of non-minority firms.
This disparity demonstrates the need for targeted programs at the federal level for minority entrepreneurs. Kerry is working on several pieces of legislation to help close the gap for minority firms. At today’s hearing, he promised to introduce bipartisan legislation this summer to improve the federal contracting process for small firms and increase oversight of federal agencies.
The Minority Entrepreneurship Development Act of 2007, which Kerry introduced in January and is cosponsored by Sens. Mary Landrieu [D-La.], Hillary Clinton [D-N.Y.], and Ben Cardin [D-Md.], would give grants to historically Black colleges and universities, Hispanic-serving institutions, and tribal colleges to help train the entrepreneurs of the future. This legislation passed the Committee with bipartisan support last year.
Kerry’s access to capital bill, S. 1256, the Small Business Lending Reauthorization and Improvements Act of 2007, would improve all of the Small Business Administration’s loan programs -- including strengthening the microloan program, which, proportionally, serves more minorities than other programs. The bill would also create an Office of Minority Small Business Development within the agency -- a provision the Committee unanimously passed last year. This bill passed the Committee on May 16, 2007.
GoodBiz113's take: As our nation's cultural melting pot grows, it simply makes sense to have programs in place to help share the wealth. Thanks to Sen. Kerry's ongoing collaborative efforts, that'll happen for win-win-win good.
Sources: Library of Congress, U.S. Census Bureau, U.S. Senate Committee on Small Business and Entrepreneurship
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