Catherine Hughes has been the chair of the Small Business Administration’s Advisory Council on Underserved Communities since January 2011. Their goal is to help expand opportunities for minority-owned and other underserved small businesses and to streamline the loan process. Marie Johns is the Deputy Administrator of the SBA. Hughes was also chairperson and founder of Radio One, the largest black-owned radio chain in the country.
Small Loan Advantage and Community Advantage Platforms
“The question we have is how do you best help companies who need technical assistance and support?” said Johns. “We created the Small Loan Advantage and Community Advantage platforms. With Small Loan Advantage we work with 60 lending partners, including large banks, and large financial institutions using half the paperwork in half the time. We’re counting on that to help large banks know they have to get back to creating smaller loans.
“The Community Advantage, Certified Development Companies, Community Development Financial Institutions, and 7(a) microlenders are front line lending institutions who know their communities. They provide the technical assistance, hand holding, and make sure the businesses are well positioned to pay the loan back.”
“But it’s only a part of the whole new day for the SBA,” Hughes added. “(SBA Administrator) Karen Mills and Marie Johns understand Americans get back to work by empowering small businesses. Most jobs are provided by small businesses. It has to start at the top, at the White House and then go down through the agency and then down to the community. We’ll see a whole new direction.” The women stressed that the SBA is more than an agency that provides loan guarantees.
The Three C’s
“There are 3 C’s,” says Johns. “The capitol loan program, counseling, which gives technical assistance, and contracting, which are business development programs for women-owned, disadvantaged and minority-owned businesses. What we’re striving to do is connect all those C’s more clearly and with the help of Cathy’s Advisory Council. We need better marketing because people don’t understand what tools are out there to support them. We seek the Advisory Council’s help to make sure we’re reaching these underserved markets.”
Let’s say someone wanted to start a beauty parlor. Where do they begin?
“Go online!” says Johns. “We just launched a new and improved website. Look for “Start a business,” click, put in a zip code so you can learn what SBA district office is closest to where you live or where you want to start your business. You can talk to a business development specialist. Tell them what you want to do and the process begins. You might be led to one of our small business development centers. We’ll have a business counselor to help you develop a free business plan if you don’t have one, create a marketing plan, explain how to network, and find contacts to make your business successful."
An Eye-opening Experience
Hughes used the SBA when she started her radio business. The experience was eye-opening.
Hughes started with a very large multinational bank as her lead lender. “They made me seek a SBA guarantee," she recalls. "I was resistant and didn't understand it, but being forced by [the bank] to get an SBA guarantee was a defining moment of my company’s existence. I was heavily leveraged because the economy was bad. A couple of the quarters I was close to 30%, so they called in my loan and the SBA guarantee was called in. I ran into my loan officer at the metro station in D.C. and he didn’t seem to recognize me. I told him, “You just loaned me a million dollars!” He looked at me and said, “We spend that much on a Christmas party, lady.” My loan was insignificant to him. The SBA stepped in and took me by the hand and let me understand what I needed to do to make my business successful. I was no longer less than a Christmas party to them. They called to check on me. They instilled in me a pride in my work. I started to feel l like an entrepreneur, all because of an SBA guarantee I didn’t want. God makes certain we get the blessing at the time when it’s needed. I want to help and encourage people in the same position I was in 30 years ago.”
Small Business Administration
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