Black chamber offers State of Black Business update

The Dallas Examiner

Held under the banner concept of “The Right Time. The Right People. The Right Conversations, The Right Results,” the State of Black Business forum was a revealing gathering intended to inform members of the Dallas Black Chamber of Commerce and community leaders of the climate, condition and trends in African American business. The chamber hosted the event at Cityplace, Aug. 22.

Simplified, the goal of the forum was to create a positive financial impact within local communities.

In that spirit, there were several workshops on funding, management and franchise ownership, as well as a multitude of other topics. Ahmad Goree, lead economic specialist at the U.S. Small Business Administration, helped guide attendees through the purpose and practices of government loans to local companies. His workshop, Federal Resources Available to Start And Grow Your Small Business, discussed aid that is available to business owners, which may be overlooked.

“Why would we want to give you money to start or grow your business?” the presenter posed rhetorically. “When we give you that loan to grow or start your business, you create jobs. Two out of three small business create two out of three next new jobs every year.”

The agency assists in this task employing what Goree described as the “three Cs” of the approach.

“First is our capital program. These are loans that we generate to small business owners, or prospective small business owners, to get them on their feet, get them to take their business to the next level,” he stated. Rather than loan out the money itself, the SBA guarantees loans from local banks.

The entire process is free since the agency is a tax-supported part of the government, the specialist pointed out. Banks are eager to participate, as the loans are guaranteed by the agency; they will get their money back even in the event of a business failing, as opposed to the risk of lending directly to a private individual whose business becomes unsuccessful.

Micro-loans for up to $50,000 and major loans topping out at $5 million are available for such growth.

“Micro-lenders are really lending to the African American community” Goree noted, expressing that payments to businesses have gone up 40 percent compared to this time last year.

The counseling portion of the SBA program aids those who have a concept for a business but do not know how to turn the idea into a descriptive business plan or functioning company.

“We have resources that help guide you, and help get your business plan and licensing,” the specialist expressed. “Or you may have a business already in existence and you want to enhance that business; you want to take it to the next level, but you don’t have the revenue to pay for an expensive consultant. We offer that consulting service for free.”

Contracting was the third “C” Goree spoke about; the SBA will assist product and service entities to become government-certified contractors.

The SBA representative noted that there was a vetting process in place for receiving a loan but asserted that credit was not one of the factors in the decision-making process. Loans at $150,000 or less are 85 percent funded by the SBA while the business owner puts up the rest of the needed money; larger loans are funded at 75 percent.

The SBA has a separate process for veterans in need of a business loan that was designed for them in mind as well by way of a local outreach center.

“We were able to get funding from Congress to open up one in the DFW area simply because we’ve had a large influx of veterans in the North Texas area,” Goree revealed. The Region IV Veterans Business Outreach Center can be accessed via the University of Texas at Arlington College of Business or by entering a search on the university’s website at http://www.uta.edu.

Goree also made the point that business owners who operated in or hired from a Housing and Urban Development zone, or a “HUB,” would get preferential treatment from the SBA, as these jobs would benefit those most in economically depressed areas. Despite the majority of Americans in HUD housing being disproportionately minority, he underscored that the program targeting HUBs promotes fairness because it is needs-based upon economics rather than focused on race or sex.

Goree in fact was able to provide 2016 data that depicted how local banks provided funds to the various demographics of minority-owned businesses. Nationally, the SBA gave out 70,000 loans amounting to around $28 billion. Within the 72 counties of 9 million citizens that Goree’s SBA region covers, there are approximately 860,000 small businesses.

In the DFW market, the SBA gave out $1.1 billion in funds. Just within the city limits, 348 loans for small businesses were created, averaging $371,000 each. The speaker estimated the funds created 1,400 jobs and retained more than 3,000 jobs.

Asian-owned business received 468 small business loans in DFW during 2016. Hispanics got 217 loans.

“As you can see, we’re struggling. African Americans are struggling when it comes to getting financing from SBA,” Goree confessed, presenting more numbers. “We only did 138 last year, out of about 3,000 small businesses in Dallas.”

The specialist suspects that, despite the overall promising numbers, so few Black businesses in Dallas were going for these loans solely due to a of lack of awareness.

“Simply because we just don’t know about it; we don’t know it’s out there,” he said on the importance of having a good foundation of economic knowledge. Certifications that the SBA offers can make loan acquisition simpler, however, if business owners know what to look out for.

Specifically, 8A certification is for socially and economically disadvantaged small business owners.

“So it’s more about the owner. What the owner’s … ethnic background is, their social disadvantages and their economic disadvantages,” Goree mentioned. “Once you’re in this program, you’re in it for nine years.”

The certification provides access to government contracting opportunities, business development opportunities and sole-source contracts, which can mean up to $4 million for goods and services and $6.5 million for manufacturing.

Further information on 8A certification, veterans assistance, SBA vetting and different programs can be found at http://www.sba.gov.

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