Supporting and Strengthening Minority-Owned Businesses During (and After) the Pandemic

Panelists and Scope:

• Susan R. Allen (CEO, U.S. Pan-Asian American Chamber of Commerce Education Foundation) leads the Asian-American business advocacy, noting the community is the fastest-growing ethnic group since the 2010 census.
• Ron Busby (President/CEO, U.S. Black Chambers, Inc.) represents 332,000 Black-owned businesses across 42 states, Canada, and six African nations, celebrating the organization's 11th anniversary.
• Ramon Calveras (President/CEO, U.S. Hispanic Chamber of Commerce) oversees a network supporting close to 5 million Hispanic-owned businesses, with membership in 250 chambers nationwide.
• The group highlights a collaborative six-year partnership with the U.S. Hispanic, U.S. Black, Pan-Asian American, and National Gay and Lesbian Chambers of Commerce to secure equitable market access.

Impact of the Pandemic on Minority Communities:

• Hispanic Community: 84% of Latino workers could not work remotely, forcing a bifurcation between business survival and family caregiving for a population where 50% are under age 40.
• Black Community: The U.S. Black Chamber forecasted a 35-40% loss in Black-owned businesses, a prediction later corroborated by Bloomberg reporting a 41% reduction; the crisis was compounded by the stimulus package's failure to explicitly address racial disparities.
• Asian Community: Asian Americans comprised 13% of doctors, 9% of physician assistants, and 10% of nurses, yet faced severe anti-Asian sentiment with over 2,000 harassment incidents reported in 45 states.
• Systemic Vulnerability: The "minority myth" regarding Asian economic success obscures the fact that 12.3% of Asian Americans live below the federal poverty line, making them the most economically divided racial group.

Key Policy Disagreements and Recommendations:

• Terminology Shift: Ron Busby and Susan Allen argue against the "minority" label, asserting that Black, Hispanic, and Asian communities constitute the "new mainstream" and require distinct, not lumped, policy solutions.
• Contract Unbundling: Susan Allen proposes incentivizing federal and corporate procurement to "unbundle" large contracts into smaller, accessible pieces to prevent small minority businesses from being "choked" by capacity requirements.
• Procurement Transparency: The panel demands verification of claims by Fortune 500 companies regarding their minority spending, suggesting that currently, billions in claimed spending lack transparent accounting to actual minority vendors.
• Payment Terms: Ron Busby highlights the federal "float" burden, where small businesses must fund operations for months before receiving payment, calling for a reinstatement of "Prompt Pay" policies to ensure cash flow.
• Banking Rates: Black business owners face interest rates twice as high as white peers; Busby notes that 10% of Black businesses lack a line of credit.

Capital Access Solutions and Financial Strategies:

• Reinventing Capital Delivery: Ramon Calveras suggests leveraging fintech firms (e.g., Square, Intuit, PayPal) and expanding capacity for CDFIs/MDIs to address liquidity issues, noting over 5,000 SBA-certified lenders exist but face capacity limitations.
• Institutional Partnerships: The U.S. Black Chamber partnered with Liberty Bank to offer credit at a 9.9% rate, contrasting sharply with the national average for Black borrowers.
• Wealth Gap Disparity: The average white family holds $117,000 in wealth versus $1,100 for the average Black family, a gap exacerbated by the pandemic that requires urgent intervention.
• Local Investment: Susan Allen urges investors to tap into the Asian American propensity for saving and legacy planning, specifically targeting innovative sectors in Silicon Valley and Austin.
• Digital Divide: The panel emphasizes the need to bridge internet access gaps in minority communities to facilitate participation in digital financial services.

Forward-Looking Statements and "Silver Linings":

• Permanent Structural Change: Ramon Calveras states the crisis is a "once-in-a-lifetime opportunity" to permanently recalibrate the economy and eliminate systemic racism, warning that without a concrete plan, the moment will be lost.
• Corporate Consolidation: Ron Busby advocates for Black business mergers, joint ventures, and consortiums to absorb the 40% loss in businesses and consolidate revenue streams within the community.
• Public Service Pipeline: Calveras challenges young minority talent to enter public office and governance roles, arguing that decision-making power in Washington, D.C., directly dictates procurement and legislative outcomes for minority communities.
• National Supply Chain Resilience: Susan Allen identifies the reliance on foreign manufacturing for PPE as a critical weakness, urging a national shift toward domestic production and the application of research for practical use.

Actionable Next Steps for the Milken Institute and Public:

• Policy Advocacy: The group plans to submit a policy white paper to the Financial Services Roundtable, House/Senate Financial Services Committees, and the Treasury Department.
• Data Dissemination: Ron Busby calls for the translation of complex data into "layman's terms" to build trust and drive local constituents to pressure elected officials.
• Economic Agendas: The panelists emphasize moving beyond social justice rhetoric to specific economic agendas focused on wealth creation, certification verification, and long-term business sustainability.
• Investment Strategy: Investors are encouraged to hire equity managers from minority communities to identify high-growth deal flow and support Black investment firms reinvesting in their own networks.