Ensuring that every American has the chance to improve their economic circumstances through hard work, saving, entrepreneurship, and other productive activities is essential to build a healthy country and society. With small business owners and entrepreneurs in traditionally underserved communities continuing to face challenges accessing capital, much attention is being focused on the U.S. Small Business Administration initiatives aimed at increasing SBA-backed loans to small businesses in these markets.
Through the public service efforts of two successful Black businesswomen, the 53-year-old Small Business Administration (SBA) is focusing unparallel emphasis on traditionally underserved communities. When she was appointed by President Obama, SBA Deputy Administrator Marie Johns said one of her core missions was "to support small businesses in traditionally underserved communities." Toward that end, Johns appointed the multi-millionaire founder of Radio One, Inc., Cathy Hughes to chair the SBA's newly-formed Council on Underserved Communities. "To ensure that small businesses throughout the country have access to the tools they need to grow, create jobs and win the future" is how Hughes defines her role in this SBA initiative. A Black business icon, Hughes started Radio One in 1979 with the help of a SBA loan. Hughes "looks forward to having members of the Council on Underserved Communities speak with entrepreneurs at a series of town halls", which kick off in Washington, D.C., this July 2011. The Advisory Council Hughes chairs include entrepreneurs and financial professionals who will provide recommendations on ways the SBA can strengthen businesses in underserved communities.
Access to credit is an important element of economic opportunity and community economic development. African-American business owners have the greatest challenges of all in accessing capital. A 2010 Minority Business Development Agency 2010 study shows Black-owned businesses being denied loans 27.1 percent more frequently than White-owned companies. Not since the Nixon Administration's "Black Capitalism Programs" has such high-level attention been put on growing Black-owned businesses. Johns and Hughes have the street and board-room sense to make a difference. Ms. Johns, who is a former president of Verizon DC, contends that one reason African Americans are passed over by banks is that they're more likely to be small-business owners. At a White House meeting Johns said: "as banks begin to lend again we find them much more interested in large-dollar loans in the $1 million to $5 million range and little interest by them in loans defined as $250,000 or less."
Johns and Hughes have the gravitas to make things happen at the SBA. Hughes represents a success story many Blacks can associate with. She says: "Many entrepreneurs and small business owners across the country have enormous potential to drive economic growth and create good-paying jobs in their local communities; I'm excited to be a part of this effort to strengthen the link between these entrepreneurs and the SBA's wide variety of resources. SBA assistance played a critical role in my success, and I'm eager to do all I can to help make sure others have access to these same opportunities." Hughes' and Johns' involvement with the SBA can help Blacks build more businesses across the country. Small business development is essential to the economic well-being and vibrancy of local communities and of the U.S. economy as a whole. Small businesses account for about half of private-sector output and employ more than half of private-sector workers. As with the case of Hughes, ownership of a small-business in traditionally underserved communities can be a significant stepping stone to economic advancement.
Access to credit should be a major theme of the discussions the Advisory Council on Underserved Communities will hold across America. Voices that have been part and parcel to our communities in the past are on the Council; such as: B. Doyle Mitchell, Jr., a third-generation of Blacks in banking. President and CEO of Washington, DC's Industrial Bank, Mitchell is also chairman of the National Bankers Association and the D.C. Chamber of Commerce Foundation.
[William Reed is publisher of Who's Who in Black Corporate America.]