Being part of a minority is no longer a disadvantage for businesses

A lot has changed in the past ten years when it comes to talking about minority-owned businesses. The U.S. Senate Committee on Small Business & Entrepreneurship estimates that more than 50% of the two million new businesses started in the United States were created by a minority group in this span. 

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On the other hand, the Minority Business Development Agency (MBDA), which is dedicated to the growth and global competitiveness of minority business enterprises, says that there are 11 million minority-owned businesses in the country that have created over 6.3 million jobs and generate over 1.8 trillion dollars in revenue a year. 

With this in mind, it’s not a surprise that there are small business grants for minorities to help these businesses thrive and be strong. And the reason is clear: if they grow, the economy grows. Read more about them in this article from Camino Financial.

Changes are still in the works

The past decade has seen many changes in the economy, job creation, and new businesses. One of those changes is the focus of these companies. Thomas D. Boston explains that scalability and professionalization are on the rise. 

Even though the past 25 years, minority groups have focused on self-employment, personal services like beauty salons and the construction industry, now, the National Minority Supplier Development Council (NMSDC) says that the main sectors that minorities are endeavoring are professional, scientific, and technical services, manufacturing, construction, wholesale trade, and administration and support, waste management and remediation services. 

There is a scalability trend in the way minorities are doing business. Yet, there are still some obstacles to overcome. For example, Jerry Porras, co-director of the Latino Entrepreneurship Program in Stanford Graduate School of Business, reports that only 18% of Latino-owned businesses secure Paycheck Protection Program loans during the pandemic. In comparison, 28% of white-owned companies got them. 

This might be why 72.3% of Hispanic entrepreneurs, for example, rely on their savings to fund their businesses, and, in general, minorities follow the same trend. 

A shift in the right direction

Even though numbers might be discouraging, fintech growth has become a game-changer for minorities to overcome their biggest challenge. It’s not that traditional banking is not an option because it is. Still, big companies tend to have long and tedious processes and administrative stoppers like racial profiling and expensive debt that discourage people like Latinos or African descendants from working with them. 

On the other hand, technology has democratized access to small business loans and grants that are faster and less focused on the person and more focused on the impact these new companies could have. 

Small business grants for minorities have become a norm for building the starting funds for a company. Every day there are more options and, in so, more funds. Combined with small business loans, the initial investment of any entrepreneur could be bigger and, therefore, easier to develop a project. 

Bigger opportunities, a bigger impact

It has already been established that, as the trend shows, minority-owned businesses are on the rise. And not only that, but job-creating during a sanitary and economic crisis is not an easy feat, yet these companies are doing it. 

As the circular economy theory dictates, the better a social group is doing, the bigger the economic spill. And in so, the better the business will go. Spending money supporting and promoting minority-owned companies is no longer a good deed but an actual move to improve the national economy. 

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