By 2044, the Nation’s prosperity will rely even more on minorities, the fastest growing segment of the population. Entrepreneurship is a sure pathway to wealth creation and a thriving national economy. Today, U.S. minority business enterprises represent 29% of all firms but only 11% have paid employees. If MBEs were to obtain entrepreneurial parity, the U.S. economy would realize 13 million more jobs.
Building Prosperity for American Families
-
Create a new generation of minority-owned firms with $100M in annual revenue to generate more jobs and help grow the U.S. economy through targeted programs and services.
-
Increase wealth creation that secures personal and family well-being reduces dependence on government resources and contributes to overall economic vitality.
-
Cultivate successful minority-owned firms to foster economic activity in local communities and increase utilization of community benefits, such as transportation, infrastructure, housing, and quality education.
Expanding Economic Investments
-
MBDA secures an annual average of $5.4B worth of contracts and financial investment in minority-owned firms, increasing the number of businesses with revenues that exceed $1M and create jobs for Americans.
-
MBDA leverages public-private partnerships whereby the private sector contributes nearly $5.5M annually in non-federal investments to the national network of MBDA programs.
-
Minority-owned businesses expand and diversify the tax base creating sustainable communities with a steady rate of economic growth.
Strengthening America’s Competitiveness
-
Position minority-owned firms to perform in high growth industries, emerging markets, and corporate supply chains.
-
Reduce the trade deficit by leveraging the unique assets of minority-owned firms in global markets.
-
Commission research reports and business analytics that demonstrates the minority business community as a vibrant and growing business sector.
Return on Investment: For every federal $1 spent MBDA gets one of the highest returns for business assistance in the Federal Government. Over the past 10 years the Agency’s programs and services have secured more than $40B in contracts and capital, with accelerated performance averages and returns on investment.
Unique Challenges Faced by Minority Firms
Overall, minority-owned firms are smaller in size and scale than their non-minority counterparts. The gap in combined gross receipts is 10:1, with only 2% of minority firms generating gross receipts of more than $1M and only 11% of minority-owned firms with paid employees.
Capital
-
Minority firms are more likely to be denied loans at a rate nearly 3x’s higher than non-minority firms
-
Minority firms are likely to pay higher interest rates; on average 7.8% while non-minority firms pay on average 6.4%
-
Minority firms are less likely to receive loans; and when approved, receive lower loan amounts.
Contracts
-
Minority firms secure a lower number and dollar amount of contracts in proportion to the number of available minority firms in the relevant market.
-
Pervasive barriers cited in contracting disparities studies include:
-
access to capital;
-
large contract sizes;
-
network access; and
-
marketplace inequities.
-
MBDA – The Solution Provider
The only Federal Government agency solely dedicated to the growth and global competitiveness of minority business enterprise.
MBDA:
- Provides access to market-based financing solutions.
- Facilitates teaming arrangements and mergers and acquisitions.
- Partners with private-sector Fortune 500 firms to provide access to global supply chains.
- Transitions minority 8(a) [SBA program] graduate firms to the private sector.
- Develops policy recommendations that address minority business inequities