Access to capital barriers are some of the top reasons preventing America’s business marketplace from mirroring the diversity that exists within the United States. Of the 27 million businesses in the United States, minorities collectively own about 22 percent and women own 28 percent. In the communications and technology industries, the number of Minority and Women Owned Business Enterprises (MWBE) are even lower.
During the July 9th “Congressional and Legislative Luncheon” session that kicked off MMTC’s 11th Annual Access to Capital and Telecom Policy Conference, lawmakers addressed how minority policy organizations are leading efforts to increase MWBE access to capital, how conference attendees could participate in their efforts, and what bills federal lawmakers have introduced to facilitate access to capital.
Former Congressmen Clifford “Cliff” Stearns (R-FL) and U.S. Congressman Edolphus “Ed” Towns (D-NY), co-chairs of the New Telecom and Internet Policy Taskforce, as well as sitting Congressman G.K. Butterfield (D-NC), shared their perspectives on how to get legislation passed at the federal level. On the state level, National Black Caucus of State Legislators (NBCSL) President Joe Armstrong shared his organization’s efforts to increase access to capital for MWBEs at the state level. Louisiana local and state lawmakers Commissioner Stephanie Lynch, President of the National Association of Black County Officials (NABCO), and State Senator Sharon Weston Broome, President of the National Organization of Black Elected Legislative Women (NOBEL-Women), revealed a forgotten resource and discussed how conference attendees could fight discriminatory lending practices within their states.
Local Elected Officials: An “untapped resource” for increasing MWBEs’ access to capital
Lawmakers generally acknowledged that states seem to be making better progress in passing legislation. Armstrong mentioned that at its December 2012 conference, NBCSL, which represents a constituency of 50 million, passed three resolutions that dealt with MWBE economic and financial empowerment. He said that two of the resolutions focused on removing barriers for certified MWBEs to participate in public works projects while the other addressed increasing procurement opportunities for MWBEs. The third resolution was aimed at increasing access to state pension funds as a way for business owners to tap into their pensions to support their business ventures.
Lynch quoted an old, yet fitting, adage that reflected the essence of the conference: “Gotta get the hay down to where the mule can get it.” She emphasized that local elected officials are “an untapped resource” that can help create and promote policies to increase access to capital for MWBEs and innovators. Like state and federal elected officials, she explained, local elected officials understand the need for more jobs in the telecommunications industry.
Holding the lending industry accountable for lending to MWBEs
With banking and financial lending institutions’ racial and gender discrimination also being another major hurdle to increasing MWBEs, Broome explained how people concerned about increasing access to capital for these businesses can get involved. She told the luncheon’s attendees to consider participating in their states’ bankers’ associations, who she said will more than likely “lend an ear” to legislators who approach them.
Broome also mentioned the importance of participating in local and state bank boards, citing Louisiana’s Commission on Human Rights, which accepts and investigates banking and lending discriminatory complaints. Armstrong suggested that people put pressure on state-chartered banks and get active on loan committees. Maryland State Senator Catherine Pugh, who attended the conference, made additional suggestions, which included ensuring that policies have an “equity ownership” component as it relates to MWBE’s and small businesses.
Urging conference attendees to be proactive about helping entrepreneurs overcome barriers to accessing the capital they need to start and grow their businesses, Towns warned that “[w]e can’t afford to just sit around and look as things begin to move.” Stearns informed attendees about two pieces of federal legislation he thought should be enacted to increase access to capital for MWBE’s.
Federal “crowdfunding” legislation and tax certificate bill can spur MWBE growth
One bill Stearns discussed was U.S. Congressman Patrick McHenry’s (R-NC) Entrepreneurial Access to Capital Act (H.R. 2930), which addressed crowdfunding – a growing “fundraising mechanism” used by MBWE’s to jumpstart their businesses. Stearns also called for Congress to reinstate the Minority Tax Certificate Policy, a policy that helped to spur MWBE growth in the communications industries from 1978 until its repeal in 1995, after which minority ownership plummeted.
Butterfield keynote emphasizes the need for digital literacy and adoption
Butterfield, Towns’ and Stearns’ former House Energy and Commerce Committee colleague and the luncheon’s keynote speaker, emphasized the importance of having both the access and skills to use technology.
“In today’s world, people who don’t have access to technology or people who don’t use the available technology will be left behind,” he said. “Having ready access to technology and possessing skills needed to make the most of that technology is an imperative in the 21st Century.”
Butterfield’s statement is crucial, particularly as Connected Nation estimated that 24 percent of U.S. businesses are not using broadband although a 2011 survey suggested that companies that use the Internet “with a high intensity grow twice as quickly as low-Web-intensity companies.”
Introducing resolutions through national state legislative caucuses, reaching out to local policy makers, and actively participating on the boards of state and local bankers’ associations and boards are some of the key ways minority and women entrepreneurs and innovators can increase access to capital. Additionally, pressuring both chambers of Congress to pass legislation that will increase access to capital for MWBE’s is an important step in ensuring that America’s business marketplace mirrors the diverse nation in which it exists.
Tiffany K. Bain is a 2011 public relations graduate of Florida A&M University. She currently serves as the Minority Media & Telecommunications Council’s Research Associate. She got her start in the industry in 2007 as an Emma L. Bowen Foundation intern at the nation’s leading cable provider.