Seated at a long, hardwood table inside the White House, Radio One founder Catherine Hughes talked about offering government resources to help African-Americans who are eager to start their own businesses.
Hughes, founder and chairperson of Radio One and TV One, has been appointed chairwoman of the U.S. Small Business Administration’s Council on Underserved Communities. The council will provide advice and recommendations to help strengthen small businesses and provide assistance for entrepreneurs of color and those who dream of owning their own companies.
“The SBA has always been there, but it’s never been a priority,” Hughes told several black journalists who gathered in the West Wing last week. “It’s never been a White House mandate from (previous) administrations to do something for underserved communities.”
Until now, that is.
Hughes announced the appointments of 15 professionals – educators, banking experts, and economists – who will serve on a newly-created SBA Council on Underserved Communities.
“This is indicative of the direction of this administration,” Hughes said.
This summer in Washington, D.C., the council will begin a series of 10 “listening sessions” to hear directly from entrepreneurs and young professionals across the country who have questions about how to start a business. Hughes said it’s important for the SBA to assist young, bright minorities who want to open businesses but lack the necessary resources.
Marie Johns, the SBA’s deputy administrator, said the SBA’s charge is to provide the tools to help small businesses in underserved communities become successful.
“Two of every three new private sector jobs are created by small businesses, so this defines the critical importance of the small business sector in this economy,” Johns said at the White House last week.
Johns’ meeting with black journalists comes as the Obama administration’s National Economic Council released “The Small Business Agenda: Growing America’s Small Businesses to Win the Future,” a report highlighting the importance of expanding and supporting the growth of entrepreneurs and small businesses across the nation.
The report, which kicks off National Small Business Week, outlines the critical investments the administration has made to support small businesses, create jobs and strengthen the economy.
“Small businesses are the backbone of our economy and the cornerstones of our communities. They create two of every three new jobs in America, spur economic growth, and spark new industries across the country,” President Obama said in a statement Monday.
“We will continue to create new incentives to help small business owners hire new workers, promote growth and do what America does best – invest in the creativity and imagination of our people,” Obama said.
The SBA provides a number of financial assistance programs for small businesses that have been specifically designed to meet key financing needs, including debt financing, surety bonds and equity financing.
However, the SBA does not make direct loans to small businesses. Rather, the SBA sets the guidelines for loans, which are then made by its partners – lenders and community development organizations.
Johns’ agency guarantees that these loans will be repaid and eliminates some of the risk to the lending partners. So, when a business applies for an SBA loan, it is actually applying for a commercial loan, structured according to SBA requirements with an SBA guaranty. SBA-guaranteed loans may not be made to a small business if the borrower has access to other financing on reasonable terms.
The SBA also provides several free online courses. This self-paced instruction covers a variety of business basics, including how to
….. start an online business, how to write a business plan, how to franchise and how to adopt technology for business benefits.
In addition, the SBA offers the Small Loan Advantage and Community Advantage programs that streamline the application process for SBA-guaranteed loans up to $250,000.
“One of SBA’s core missions is to support small businesses in traditionally underserved communities, including minorities, women, veterans, people with disabilities and in rural areas,” Johns said. “The Council on Underserved Communities will provide valuable insight and advice into how we can ensure that small businesses in these communities throughout the country have access to the tools they need to grow, create jobs and win the future.”
The SBA, for most industries, defines a “small business” either in terms of the average number of employees over the past 12 months, or average annual receipts over the past three years. It defines a U.S. small business as a concern that:
· Is organized for profit;
· Has a place of business in the US;
· Operates primarily within the U.S. or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor;
· Is independently owned and operated; and
· Is not dominant in its field on a national basis.
“Thirty years ago, I grew my business with the help of an SBA loan,” Hughes said. “Now I’m so pleased to be chairing the Council on Underserved Communities and help entrepreneurs in communities across the country take advantage of those same opportunities for success.”