Read Excerpts of this article from the San Francisco Post (8/12/20).
Read Excerpts of this article from the Oakland Post (8/26/20).
How do we save African American Businesses in our country?
What programs does the Biden/Harris administration need to implement after their election to stimulate Black Business growth?
The African American community has sustained a significant setback during this Pandemic, which could last for years.
African Americans have experienced a higher percentage of COVID-19 deaths than any other population ( a rate of 1 in 1400 compared to 1 of 3500 non-minority). Many healthcare facilities in our communities have been closed over the last several years, which also exacerbates this problem.
Now the rumors of the dismantling of the U.S. Postal Services by the Trump Administration, where more than 40% of the employees are minorities, will throw numerous African Americans out of work, adding them to the already high unemployment rolls.
Our children are also significantly impacted because of limited access to the Internet and broadband connectivity, forcing many families to have them return to unsafe conditions in our schools. And finally, we have lost 40% of African American businesses during this Pandemic, some of which may never return.
All of these factors have had a Tsunami-like effect on the African American community today and for the future.
The lack of capital and banking support for African American Businesses has created a condition that existed before the Pandemic and continues as an issue. The Payroll Protection Program ( PPP) had more than $1 trillion in loans for small businesses, but many African American companies could not access these funds. Our community has the lowest participation in this type of loan assistance provided by the Small Business Administration (SBA). The structure utilized to distribute the funds under PPP was SBA’s 7(a) program. This is SBA’s most popular program for supporting loans to the small business community $23 billion annually before the Pandemic. Historically, African American businesses had the lowest participation rate in this program (less than 1.3%), and the 14 non-bank SBA Preferred lenders none were African American entities. Therefore, African American Businesses never had a chance to obtain significant PPP funding as well as their poor relationship with the commercial banking industry.
The solution for African American businesses must result in jobs and wealth creation in our communities. The Federal Government has traditionally been the catalyst that has driven our growth over the years. Through law and regulations established in the ’70s and ’80s by the late Congressman Parren Mitchel required federal, state, and major corporations to provide contracting opportunities to the African American Business community under regulation 95-507. For the last couple of decades, African American business growth has declined with the expanded definition of Minority Businesses. This has made the size of the federal contract pie smaller for African American businesses, thus reducing jobs and wealth in our communities. The annual federal spending budget exceeds $750 billion.
Suggested areas of focus below to support the revival of the African American business community during the Biden and Harris Administration.
- The Biden administration must place a significant emphasis on capital and loan creation for the African American Community. Institute at least a $50 billion program to aid African American businesses harmed by the Pandemic and unable to participate in the PPP program. This can be done by extending the existing program and establishing a funding program for African American Businesses.
- Greater support for the Minority Business Development Agency ( MBDA) division of the U.S. Department of Commerce was established to aid minority businesses across the country. They have one of the smallest budgets of any agency, currently $50 million. MBDA’s budget should be doubled to $100 million so that grants and increased technical assistance can be provided. Also, MBDA should assist in identifying capital for Minority-Owned banks. Provide technical support to HBCU institutions to promote contract opportunities in Federal, State/Local, and Commerical areas. Assist the Minority Business community in developing greater access for their products and services in international markets, a significant initiative in Internet commerce. MBDA should participate in the Small Business Innovate Research ( SBIR) grant program to promote inventions and ideas of the African American community.
- Increase the percentage of federal contracts available to African American businesses and end the bundling practice of Federal and State/local contracts. This activity over the years has limited contracts for African American businesses.
- Eliminate the contract size standard cap for African American Businesses and increase the number of years of their participation in the SBA’s 8(a) program from nine to twelve years.
- Create and foster greater participation of African American businesses in the manufacturing sector. This should include programs that promote suppliers of healthcare products and services.
- Establish a grant funding program to restore small businesses in local communities, i.e., barbershops, salons, restaurants, and small retail operations. These businesses have been the backbone of the economy in the African American Community.
- Strengthen the tax benefit for investors that partner with African American businesses
- Create a long-term capital investment program to support our HBCU community. Provide a matching program for monetary contributions to HBCUs by the federal government.
- Appoint African Americans to head the U.S. Department of Commerce and the Small Business Administration
The African American Community requires a “Marshall Plan,” today similar to the economic program established after WW ll, to rebuild Europe. Our community will need some major financial help at all levels. We need to reconstruct the African American community today and protect our children and future generations
Please VOTE as if your life depends on it because it does.
Written by Author, Albert E. White: Race for the Net-When African Americans Controlled the Internet and What Happens Now?
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