Minorities In Business
Minorities In Business
Small business owners seeking assistance can find the maze of
government, public and corporate resources too complex to tackle
alone. When an entrepreneur belongs to a minority group, the
obstacles may prove overwhelming.
By government definition, a minority-owned firm is one that
is 51% owned by a U.S. citizen who is Black, Asian, Hispanic or
Native American. The company can be any size, as long it's
for-profit and physically located in the United States or its
territories.
According to one congressional study, minority-owned
businesses typically have a more difficult time accessing both
funding sources and the federal marketplace. They also see fewer
contracting opportunities and obtain smaller cuts of venture
capital. Given this, many government and private sector agencies
have stepped up efforts to help these companies grow.
The Minority Business Development Agency (www.mbda.gov) is the
only federal agency solely dedicated to the creation, growth and
expansion of minority-owned businesses in the United States. As
part of the Department of Commerce, the MBDA has established a
network of minority business centers and strategic partners who
work with entrepreneurs to develop their firms to their full
potential.
In addition to a wealth of business planning, start-up and
expansion information, the MBDA also offers guidance on loans,
grants, certifications and related topics.
The sections that follow describe other organizations and
agencies that deal primarily with procurement and access to
capital.
Procurement
Hundreds of federal buying prospects are scattered all over
the country. Procurement is the process, beginning
to end, of landing one of these deals. While guidelines for
government contracts vary from agency to agency, expect to do
the following tasks no matter your product or service:
- Learn about the bidding processes for the contract
award you are trying to win.
- Understand what the agency requesting bids expects from
its vendors.
- Prepare a strong profile of your business for the
Central Contract Registry.
- Contact the hiring agency's small business or
procurement specialist.
For detailed help with the process in its entirety, these
organizations are good starting points:
National Minority Supplier Development Council
www.nmsdc.org
The National Minority Supplier Development Council matches
minority-owned businesses with large corporations looking to use
their services. Currently, their network enrolls 3,500 corporate
members, including most of the nation's largest publicly-,
privately- and foreign-owned companies, universities, hospitals
and other institutions. The NMSDC has connected more than 15,000
minority-owned businesses with member corporations seeking to
buy goods and services they offer. Activities include regional
trade fairs, business opportunity fairs and other business
development events held nationwide throughout the year. The
NMSDC also sponsors ad Advanced Management Education Program
(AMEP).
Small Business Administration - Procurement
Offices
http://www.sba.gov/content/procurement-center-representatives
The Office of Government Contracting works to give small,
disadvantaged and woman-owned businesses access to federal
government contract awards, as well as to large prime
subcontract awards. The site includes a complete online list of
government procurement offices, instructions for Central
Contractor Registration and information on disaster contracting.
The rest of the comprehensive SBA site (www.sba.gov) also
provides excellent guidance on scores of business topics,
including business profiles, loans, business plans, insurance,
corporate structure and much more,
Business.gov
http://www.business.gov/expand/government-contracting/
This site not only offers links to government business
opportunities, it also provides information on how to become a
federal contractor and on the rules and regulations for federal
contractors. In addition to these business opportunities,
Business.gov lists individual state procurement agencies,
instructions on how to register as a contractor and the correct
way to bid on opportunities. The section on Government Contract
Training for Small Businesses is particularly helpful.
The following Web sites provide additional information
central to the procurement process - and some even offer
contract opportunities within their organizations.
Central Contractor Registration
https://www.bpn.gov/ccr/default.aspx
As mentioned earlier, a business must be registered in the CCR
to do business with the U.S. federal government. On this site,
business owners will find online forms, registration
instructions, news for potential and registered contractors, and
links to other resources. What's more, an entire section
targets small businesses.
National Business Information Clearinghouse (BIC)
http://fgnw.natbic.org/index.php?id=15119&lang=en
A free Web portal, BIC provides a number of resources for small
businesses, one of which is on how to obtain certification as a
minority business. Getting certified can help land contracts
with local, state, and federal government agencies, as well as
from large corporations
SUB-Net
http://web.sba.gov/subnet/search/index.cfm?CFID=8057813&CFTOKEN=9cb8aacbd91de2b2-15346EA3-CAA5-39A9-E9D3571F4578D03E&jsessionid=7e3043a89e06d2a588b94a177842e13497d7
The U.S. Small Business Administration's SUB-Net lists
government-wide subcontracting opportunities for construction
projects.
NASA Acquisition Service
http://procurement.nasa.gov/cgi-bin/nais/link_syp.cgi
Available business opportunities for NASA's departments, offices
and centers are listed. There also are links to NASA's
procurement policies and tips on doing business with different
centers.
U.S. EPA Regional Procurement
http://www.epa.gov/oam/regions/
The Environmental Protection Agency has various needs for
sources and solicitations. Sample solicitations include IT
support services, furniture procurement and emergency and rapid
response services.
Department of the Interior National Business
Center
http://ideasec.nbc.gov/j2ee/login.jsp
This site lists procurement opportunities for the Department of
the Interior and participating agencies - Bureau of Indian
Affairs, Bureau of Reclamation, National Park Service, Office of
Aircraft Services, Office of Special Trustee for American
Indians, U.S. Fish and Wildlife Service, U.S. Geological Survey
and U.S. Maritime Administration.
Administration for Children and Families
http://www.acf.hhs.gov/grants/open.html
This page lists mandatory and discretionary funding
opportunities, as well as available grants.
USDA Office of Small and Disadvantaged Business
Utilization
http://www.da.usda.gov/osdbu/
Its stated mission is "to provide maximum opportunities for
small businesses to participate in USDA contracting activities."
The site lists opportunities, events and guidelines.
Army and Air Force Exchange Service (AAFES)
http://www.aafes.com/dversty/07/supply/info.htm
The AAFES works with a large number of minority- and women-owned
small businesses. They look for quality products, competitive
prices, on-time delivery and customer demand when choosing
suppliers.
Federal Business Opportunities
www.FedBizOpps.gov
Government agencies will post their procurement notices.
Companies can use FedBizOpps.gov to search for federal contracts
by solicitation numbers, procurement classification codes, and
selected government agencies.
ARNet Library - Procurement Regulations
https://www.acquisition.gov/
The Acquisition Reform Network Web site contains a complete list
of procurement regulations, as well as links to procurement
forecasts at federal agencies.
Access To Capital
As most experienced entrepreneurs know, steady cash flow
serves as a business's lifeblood. Without available money, the
operation ceases to survive - plain and simple. Helping to
assure longevity of minority-owned operations, various lending
organizations, banks and government agencies offer exclusive
access to capital for this market group.
Regardless of the type of financing you pursue, keep in mind
that most lenders, including those that work with the Small
Business Administration, expect applicants to come prepared.
Before visiting the bank to request a loan make sure you measure
up to the following criteria:
- Good Credit History. Obtain your credit rating
well in advance of loan application. Mistakes sometimes
take weeks to correct - so make sure figures, dates and
other information is accurate and current.
- Ability to Pay Back Borrowed Funds. Banks look
at business cash flow and collateral, so start-up owners
should put together a loan package centered on a repayment
plan.
- Equity. Even start-up business owners usually
must invest some personal funds into the company. The
amount depends upon the type of loan.
- Collateral. These are those personal and
business assets that a business owner can sell off to repay
a loan. Most loan programs, including microloans, mandate
at least some collateral (e.g. house, car, equipment,
etc.).
- Experience. Entrepreneurs with little or no
experience in their new businesses should not apply for
financing unless they have partners or employees familiar
with the product or service. In addition, the owner should
take time to work in the discipline first, as well as
enroll in related classes.
The list below offers information and links to
institutions prepared to assist minority entrepreneurs or other
small business owners with the funding process:
The Minority Business Development Agency (MBDA)
http://www.mbda.gov/?section_id=3
A
product of the U.S. Department of Commerce, the MBDA is a
federal agency that focuses on growing minority-owned firms'
size, capacity and scale. Through a solid network of minority
business centers and strategic partners across the country, the
MBDA provides information on, and resources for, loan
application.
The MBDA Web site likewise provides excellent skill-building
tools, addressing subjects critical to a business's
establishment and operation. The Beginner's Essentials
section focuses on the nuts and bolts of getting started,
particularly on the steps leading to start-up funding.
Small Business Administration (SBA)
http://www.sba.gov/category/navigation-structure/loans-grants/small-business-loans/sba-loan-programs
The SBA works with selected banks nationwide to help structure
loans, provide equity capital advice and assist with special
purpose loans for small business owners. Unfortunately, grant
awards are very rare. Actually, neither the SBA nor other
federal and state government agencies sponsor grants for
starting a company, paying off debt or covering operating
expenses. This includes designated gifts to minorities.
The most common SBA financial assistance programs are:
Non-government lenders - including most banks and some
non-bank financial institutions -- fund all 7(a) loans.
Available on a guaranty basis and structured according to
SBA requirements, this program mandates that applicant
firms must: meet SBA size standards, be for-profit, lack
business or personal resources to generate funds and be
able to demonstrate repayment.
In partnership with Certified Development Companies, the
504 Program, a financing tool for community economic
development, offers small businesses long-term, fixed-rate
financing for major fixed assets, such as buildings and
land. A 504 project typically consists of a private-sector
loan obtained with a senior lien covering up to 50% of the
project cost; a loan secured with a junior lien from the
CDC covering up to 40% of the cost; and at minimum , a 10%
equity contribution from the applying business.
This program, which recently received additional funding
through the Recovery Act, partners with commercial lenders
to provide loans in amounts too small (up to $35,000) for
larger loan programs to consider. Small business owners are
the target market, particularly those with minimal capital
requirements.
SBA loans come through commercial sources (the SBA does not
directly lend money), so entrepreneurs must apply through their
local participating banks or lending institution.
Visit www.sba.gov/localresources/district/or/financing/OR_ORPLPCLP.html
for a list of SBA lenders.
ACCION USA
http://www.accionusa.org
This private non-profit organization is a part of the U.S.ACCION
Network - the largest domestic microlending group. Established
in 1991, ACCION USA largely works with minority-owned businesses
and offers loans of up to $50,000. The organization also
provides financial education opportunities, covering subjects
such as understanding credit, money management, small business
tips and other issues critical to running a small firm.
What's more, ACCION USA regularly helps owners who have been
denied by the bank due to insufficient credit history, limited
time in business or type of operation.
The agencies listed below also provide small-business loan
assistance, with some offering special services to minority
entrepreneurs:
Business.Gov
http://search.business.gov/startLoans.html
Given that individual state governments offer assorted financial
programs to minority-owned operations, Business.Gov provides an
excellent search tool to locate regional funding opportunities
nationwide.
Community Development Venture Capital Alliance - Central
Fund
www.cdvca.org
Promotes use of the tools of venture capital to create jobs,
entrepreneurial capacity and wealth to advance the livelihoods
of low-income people and the economies of distressed
communities.
Fulcrum Venture Capital Corporation
http://www.fulcrumvp.com/
Assembles capital pools from qualified investors and invests
that capital on their behalf in privately held businesses that
are important in minority and urban communities.
Milestone Growth Fund, Inc.
www.milestonegrowth.com
Provides equity type financing to minority-owned companies.
New York Community Investment Company
www.nycic.com
Provides long-term capital of up to $1 million to select growing
businesses in New York and has a special interest in funding
companies that are minority-owned, woman-owned, or located in
lower-income areas.
Pacific Community Ventures (PVC)
www.pacificcommunityventures.org
Provides resources and capital to businesses that have the
potential to bring significant economic gains to low and
moderate income communities.
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