WASHINGTON – Senator Mary L. Landrieu, D-La., Chair of the Senate Committee on Small Business and Entrepreneurship, held a hearing to discuss the challenges facing minority-owned businesses trying to get venture and other forms of capital funding, and the role entrepreneurial training can play in helping these firms survive and flourish. In addition to minority access to capital, the hearing focused on the important role that government contracting can play in enabling small businesses to grow and expand. Finally, the hearing highlighted the wealth disparities in this country and ways the Committee and the Small Business Administration (SBA) can work to close these gaps and tighten these disparities through targeted business education and training.
“Minority-owned business enterprises accounted for more than 50 percent of the 2 million new businesses over the last 10 years,” said Senator Landrieu. “These businesses cross the entire industrial spectrum from financial services and health care to construction and transportation. We heard testimony today that the 8(a) contracting program has some of the strongest controls to prevent fraud and abuse. To promote minority entrepreneurship, we must protect this and other programs from the damaging effects of ineligible participation while also encouraging access to capital for minorities to start and grow their new businesses.”
Since 2009, Senator Landrieu has convened at least three meetings to address ways that this Committee and the SBA, through its many programs, can address and provide a remedy to the issues affecting minority small businesses. The first panel included the Honorable Marie Johns, Deputy Administrator of the U.S. Small Business Administration. During the second panel, Committee members heard from a dynamic group of experts in the finance and contracting sectors and business leaders including the President of the National Urban League. The third panel included an Administration official from the SBA and a managing director with the Government Accountability Office(GAO).
According to the most recent data available from the SBA Office of Advocacy, minority-owned small businesses are among the fastest growing segments of the small business community. From 1997-2002, firms owned by African-Americans grew by almost 45%; Hispanics by 31%; Asians by 24%; and Hawaiian and Pacific Islanders by 49%. According to Dr. Robert Fairlie in the second panel, minority-owned businesses produce $1 trillion in total sales and employ 6 million workers. Despite positive growth statistics from the SBA Office of Advocacy, research presented by Dr. Robert Fairlie also showed minority owned businesses are being hit especially hard in the current economy due to fewer resources and the size of their business. His research showed the average minority-owned business has revenues of $178,000 per year, which is less than 40 percent of the level for non-minority businesses.
To view Senator Landrieu’s opening statement, please click here.
To view testimony from the hearing, please click here.