(Speech date: Wednesday, July 9, 2014 In New York)
“I’m delighted to be with you today. This has been an incredible journey for me. I feel blessed to have this opportunity to serve as SBA Administrator and be a champion for America’s small business owners.”
“I was born in Guadalajara Jalisco, Mexico, and immigrated to this country at the age of 5 with my mother and five siblings .I come from a family of migrant workers in Mexico and arrived in California not speaking a word of English. My family didn’t have much, but what we did have was a belief that America was a land where dreams could come true.”
“My mother worked in a chicken processing plant to give her six kids opportunities that she would never have. My abuela back in Mexico would write me these wonderful letters. She’d tell me that if I worked hard and played by the rules in America, anything was possible. She said, ‘Maria: You could even work in an office some day and become a secretary!’ Well, the good Lord heard her. Indeed, I’ve had the opportunity to work in an office and become a cabinet secretary in Washington, D.C. Only in America can we harvest such bounty of opportunity.”
“… But my selection was also made in recognition of the growing role that Hispanics – and Latinas, in particular – are playing in the economic growth of this nation. It’s a remarkable sign of the progress we’ve made that I’ll soon be one of three Latinos in the cabinet. Don’t you just love Julian Castro? He’s going to make history when he’s confirmed at HUD. Soon, for the very first time, there will be three Latinos serving in the cabinet of the President of the United States.
These are important milestones to be celebrated. When I became a cabinet secretary in California in the 1990s, I was the first Latina to do so. Then, as now, I’m standing on your shoulders. I wouldn’t be standing where I am today without organizations like LULAC who’ve worked so hard to empower Latinos to seize the chance to become leaders.”
It’s an exciting time to be the leader of the SBA
“… Some of the most important work LULAC does today is in the areas of education and economic empowerment. You’re partnering with major corporations – many of whom are here today – to create opportunities for Latinos to move up the ladder and grow. And I’m so proud that you’re also partnering with the SBA to unleash the power of the Hispanic entrepreneur. My agency and yours have been putting on trainings together at conferences like these for many years, teaching Latinos about how to get started in business, how to access capital, and how to get contracts.
It’s an exciting time to be the leader of the SBA. Today, two out of three net new jobs in America are being created by small businesses. Small businesses employ one in two members of the private sector workforce. It’s incredible what’s taking place, and it’s Latinos who are driving so much of that progress.
There are more than 3 million Latino-owned businesses in America today, and they’re pumping nearly half a trillion dollars into our economy every year. Latinos in America are starting businesses at 3 times the national average. Immigrant-owned firms today employ 1 in 10 U.S. workers. Forty percent of Fortune 500 companies were started by immigrants or children of immigrants.
As SBA Administrator and a Hispanic entrepreneur myself, I’m proud of how far we’ve come. Our economy has now added back all the jobs we lost in the recession. That’s a remarkable accomplishment, when you consider the economic peril we faced when President Obama took his oath of office five and a half years ago. So as we fight for civil rights and voting rights, we must step up our efforts to fight for market rights so more of our brothers and sisters can share in this prosperity.”
“… Entrepreneurship is an essential part of the Latino culture. We don’t just work hard, we work smart. We take risks and we start new companies. Many of us who arrived in this country faced language barriers and cultural barriers that made it difficult to advance as far as our talents would allow. In fact, my start in public service was an appointment to the Federal Glass Ceiling Commission to explore how we could create more opportunities for women in corporate board rooms.
We’ve made real progress, but at the same time, Latinos have developed a special culture of entrepreneurship by starting our own enterprises. It’s remarkable to see the growth and strength of Latino-owned businesses. Latino purchasing power is expected to top $1.5 trillion by next year. This means if the American Latino market were it’s own country, we’d be the 11th largest economy in the world – just below France and Mexico and larger than Korea and Spain. We’ll have more per capita purchasing power than Brazil, Russia, India and China – the fast-growing BRIC countries we hear so much about.
So to our corporate partners here today: I urge you to think hard about the untapped potential of this vast market. Sure, it’s important to be pioneers in new emerging foreign markets. But it should not be done at the expense of the critical U.S. markets, and there are none bigger than the Hispanic market.
Make no mistake, these numbers are only getting bigger According to Census forecasts, the U.S. Latino population will grow by 83 million people by the middle of this century. This will make Hispanic America larger than the current population of Japan and almost as big as Russia. Hispanic growth will be the equivalent of adding 10 additional New York Cities. So I challenge you to be disciples of change to make certain that we’re spurring the economic activity here domestically, at home.”
What’s new at the SBA
“… During my time at the SBA so far, I’ve been focusing on making sure our systems are keeping pace with the rapid pace of changes around us. We all see the transformative impact of technology on how companies conduct their business and how consumers live their lives. Today, you can swipe a check and deposit it through your phone. So not long after I arrived at SBA, I asked my team: Why is the SBA still using faxes and pushing paper? So next year, we’re automating our lending application to reduce the burdens on small business owners.
It’s going to make applying for credit cheaper and faster, and that’s good news for anyone who has ever had to navigate the process of getting an SBA loan. I believe we must make it easier for borrowers to borrow and easier for lenders to lend.
Did you know that the Urban Institute did a study and found that minority business owners are 3 to 5 times more likely to get an SBA loan than a conventional loan? I have a very keen understanding of how important the SBA is to the success of Latino-owned businesses. I started a community business bank in Los Angeles some years ago and ran it until I came to Washington this March. I’m absolutely determined to apply my experiences to the goal of make it easier for Hispanic entrepreneurs to get the capital that’s the lifeblood of any small business.
The truth is, we know capital is not reaching minority-owned businesses today in an equitable way. Your race or your gender should never impact your ability to get a small business loan; only your creditworthiness should! That’s why one of my first big moves at the SBA has been to change our underwriting rules, which were unfair to the communities most affected by the recession. During the Recession, many small business owners spent money out of their own pockets to make payroll, cover costs, and weather the downturn. As a result, their personal credit score went down, and it became even more difficult for them to get an SBA loan.
So this month, at my direction, the SBA is implementing new, fairer credit standards. We call it the “SBA total credit score.” It combines your personal and business credit scores, so those who make personal sacrifices for their employees in tough times aren’t penalized for doing so.
I’m doing something else to speed capital to more Hispanic businesses: I’ve charged my Capital Access team to create lending referral networks with microlenders across the country. If you don’t qualify yet for an SBA loan, you shouldn’t be sent packing and told “better luck next time.” If an SBA lender can’t say “yes” yet, we’re asking them to make referrals to microlender that can. Microlenders can work one- on-one with entrepreneurs to improve their credit rating and their cash flow. They’ll start you with a smaller loan, and they can give you free advice on how to build your credit and then refinance your microloan into a larger loan.
“… Every big company in America started small. Do you want to know what companies like Under Armour, Ben & Jerry’s, Nike and Fed Ex all have in common? They were all once small business who grew into larger ones because SBA was there to guarantee a loan in their infancy, when the big banks would not.
Most people don’t understand that about the SBA: We’re the agency that makes capital available when the major banks cannot. Every dollar of capital that we inject into the economy is money that would otherwise stay on the sidelines. The single biggest factor that determines whether a small business stagnates or grows comes down to one word: capital.
You can manufacture the greatest widget known to man, or make the best Texas chili since the invention of the bean, but if you don’t have the capital to hire staff, buy equipment, and expand your operations, you’ll stay small. So in my first few months at the SBA, I’ve been focused on how we can speed that transformation.
We’re working with our corporate partners to help more small business enter large corporate supply chains. We call this effort the American Supplier Initiative. We’ve already received more than two dozen commitments from major companies like the IBM Foundation.
They’re giving small businesses the opportunity to make big revenue by become indispensable parts of their global supply chains. Listen to this amazing statistic: small firms that enter corporate supply chains grow their revenue by an average of 250 percent and grow their workforce by an average of 150 percent.”
“…Because when you do business-to-business sales with small companies that have sufficient working capital and cash flow, it’s a win-win. The small business gives you world-class goods and services, and your corporation invests in local communities and creates local jobs. There’s absolutely nothing more patriotic and American than that.
So let me close today with a call to action for every person in this room. You don’t have to hold elective office, or sit in a corporate board room, or even be a member of LULAC to help build the market power of the Latino community. Because you know what? Voting is not something you do every other year. You vote every day in America. You vote with your wallets.
Every time you make a decision as a consumer, you’re voting whether to support the companies that invest in our community, that pay-family sustaining wages, that support small business, and that promote diversity in the board room and on the factory floor. Who knows? Maybe your vote will help a Latino-owned business become the next great American success story.”
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