EYE ON BUSINESS: Open letter to candidates details hopes of the black business sector
Good things ahead for those who truly commit to boosting minorities’ economic fortunes.
BY ERNEST FOUNTAIN
As President of the Black Business Council (BBC) of Nevada, I am sending this letter to all Democrats and Republicans running for the White House or Congress in the upcoming election.
If implemented, the recommendations outlined here would have an enormous impact on the black business sector. If you are sincere about doing something for the minority community, embracing these issues would be a definitive way to show it.
• Increase the budget of the Minority Business Development Agency (MBDA), which was created by President Richard Nixon in 1969. The only federal agency established to foster economic growth for minority business enterprises (MBE), its budget is only $31 million. That funding should be increased to roughly $100 million — in order to provide additional funding for the 44 existing centers, and create 40 more across the country. Through those centers, the agency should be allowed to help eliminate redlining and racism in lending by making direct loans to MBEs.
• Provide MBDA with $500 million in guaranty lending authority, so that its centers can provide additional capital to minority-owned businesses across the country. This would be especially helpful to black businesses, which have not received more than 2% of Small Business Administration (SBA) funding in the last seven years.
• Revamp the SBA’s 8(a) program to make the SBA the lead marketing arm for small, disadvantaged firms, and to help ensure that federal agencies set aside contract opportunities for those companies. Reestablish the Business Expense Program that allows 8(a) firms to receive grants to purchase equipment required to perform the work on contracts secured by SBA.
• Pass legislation requiring the SBA to approve minority firms as lenders under the 504 program and the Small Business Investment Company (SBIC). These initiatives were established by Congress in 1958 to facilitate the flow of long-term capital to America’s small businesses. There is only one minority-owned 504 Certified Development Company out of 273, and no minority SBICs out of 376.
• Establish legislation to ensure that minority firms are approved under the New Markets Tax Credit Program administered by the Treasury Department’s Community Development Financial Institution Division (CDFI). In 2009, the General Accounting Office performed a study revealing that minority firms were unlikely to be approved by CDFI, and there have been no increases in minority approvals since that study was completed. Currently, 916 firms have been approved for tax credits under the program; only 10 have been minority-owned.
• Pass legislation to eliminate the executive order signed by President Obama in 2010, which restricts non-union companies from bidding on federal contracts over $25 million.
• Establish stronger legislation to ensure that historically black colleges and universities (HBCUs) receive more funding from the Department of Education. In the most recent round of funding, only $3.5 million out of $171 million went to HBCUs.
• Rewrite legislation under the Parent Plus program, so that parents with minor credit problems can still obtain college loans for their children. HBCUs have lost over $500 million in revenue, and seen enrollment decline by 25 percent, since the policy change was implemented over two years ago.
Taking these actions would have an immediate impact on the lives of minorities in this country, and give them new hope that the system can work in their favor. Whichever party implements this strategy would be sure to win the presidency in 2016, and we at the Black Business Council will stand with you to ensure passage in both houses of Congress.