Chamber of Commerce officials and business owners say that federal stimulus money has not been effective at helping minority-owned businesses in Washington even though $5.4 billion has been awarded to the state, according to the Web Site recovery.gov.
According to the most recent data published by the U.S. Department of Commerce Minority Business Development Agency on Washington state, minority businesses brought in over $10.7 billion in gross receipts and provided 75,000 jobs in 2002. Given language barriers, lack of local connections and limited access to credit, however, minority business owners have been hit hard by the economic crisis, and they may have a more difficult time accessing help from government programs designed to aid small businesses.
“I do not know of any single business that is Latino that has applied for stimulus funds and that has gotten a grant,” said Michael Arens, who works as treasurer for the Northwest Washington Hispanic Chamber of Commerce and has a paralegal business of his own.
He said that language barriers and a lack of education made it hard for members of the Latino community to take part in government programs.
“There are a lot of Latinos that are busy working and doing other things so it is difficult for them to go to school and learn English,” he said.
Trong Pham, president of the Washington Vietnamese American Chamber of Commerce, agreed that language barriers often prevent Vietnamese business owners from finding out about programs that are there to help them.
“They need to have some kind of outreach program,” he said, referring not only to federal stimulus programs but also the Small Business Administration (SBA), a government agency specifically designed to help people start and finance small companies.
“Now it’s us that’s reaching out and not the federal agency,” Pham said. “There’s no funding that’s available for translation services.”
Jesse Robbins, who works for the Business and Economic Development Center at the University of Washington, said studies that his organization has done have found that minority businesses also have a harder time accessing credit than other businesses do. He said this was probably because minority-owned businesses are generally smaller and because there are inherent biases in the lending process.
“All of the effects created through the economic crisis are amplified in the minority community,” he said.
Tiffany Bui agreed that the tight credit market made it hard for people like herself to get started. She said that when she started her printing company, Alpha Graphics, in Everett earlier this year, getting a loan from the SBA took between six and eight months and required that she use her house as collateral.
“We went through the SBA loan program and it was very discouraging,” she said. “There was really no room for flexibility.”
Fernando Martinez, president of Northwest Minority Supplier Development Council, said his organization tries to pair minority-owned businesses with Fortune 500 companies and government agencies in Washington, Oregon, Alaska, Idaho and Montana.
He said that some public agencies, like the Department of Transportation, were working hard to make sure the stimulus money they received benefited minority firms. Others, however, have chosen to work with companies they are familiar with because of time restraints on getting projects done, he said.
“The stimulus funding is continually getting to non-minority companies, companies that are already doing business with the government,” Martinez said. “From this council’s perspective it is not really meeting the need or creating economic parity.”
Dr. Leon F. “Skip” Rowland, executive director of the Urban Enterprise Center at the Greater Seattle Chamber of Commerce, agreed that knowing the right people and having connections was an important part of doing business in Seattle.
“Culture is an operating system, a way of doing business,” he said. “If you do not speak English you’re going to have a disadvantage in the marketplace.”
However, Rowland said that the disadvantages that some minority business owners have cannot be attributed to their minority status, but were the result of the natural tendency of established businesses to work with the familiar. He said that minority companies who had learned to work within this system could do very well.
“There is no complaint in an organized way that I have heard that says that minorities aren’t getting their fair share,” he said. Martinez, on the other hand, said that he thought that there were ways the stimulus program itself should address the disadvantages that minority-owned firms have during economic crisis. He said that it would be hard to create a level playing field without explicitly requiring that a certain percentage of stimulus funds go to underrepresented business.
“If they are considering a second stimulus, there should be more requirements ensuring that the ethnic minorities and women have access,” he said.
For more information about the stimulus package in Washington State on the Internet: http://www.recovery.gov
For more information about the Small Business Administration: http://www.sba.gov