The Minority Business Development Agency: Making Minority-Owned Businesses Greatby GDN Shared Post December 26, 2017
By 2044, the Nation’s prosperity will rely even more on minority-owned businesses, the fastest growing segment of the population. Entrepreneurship is a sure pathway to wealth creation and a thriving national economy. Today, U.S. minority-owned businesses 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 businesses with $100M in annual revenue to generate more jobs and help grow the U.S. economy through targeted programs and services.
- Increase wealth creationthat secures personal and family well-being, reduces dependence on government resources, and contributes to overall economic vitality.
- Cultivate successful minority-owned businesses to foster economic activity in local communitiesand 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 investmentin minority-owned businesses, 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 businesses to perform in high growth industries, emerging markets, and corporate supply chains.
- Reduce the trade deficit by leveraging the unique assets of minority-owned businesses 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 businesses 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 businesses generating gross receipts of more than $1M and only 11% of minority-owned businesses with paid employees.
- Minority firms are more likely to be denied loans at a rate nearly 3x’s higher than non-minority businesses
- Minority firms are likely to pay higher interest rates; on average 7.8% while non-minority businesses pay on average 6.4%
- Minority firms are less likely to receive loans; and when approved, receive lower loan amounts.
- Minority firms secure a lower number and dollar amount of contracts in proportion to the number of available minority businesses 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 competiveness of minority business enterprise.
- 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
This collection of links and resources will minority-owned businesses learn more about MBDA.
- The Minority Business Development Agency: Vital to Making America Great
- MBDA 101: A Guide to MBDA Programs and Performance
- FY 2015 Annual Performance Report
- FY 2017 Budget Request
- Contracting Barriers and Factors Affecting Minority Business Enterprises A Review of Existing Disparity Studies
- U.S. Business Fact Sheet
- Request a Speaker for your Event
If you need additional information, please contact us at 202-482-6272
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