Gaining the Competitive Edge - Deborah Sawyer of Environmental Design International Inc

Black Enterprise, Nov, 2000 by Sonya Kimble-Ellis

The report should serve as a wake-up call to both lenders and investors.

In order to increase minority economic participation in business ownership, the study recommends:

(1) Increasing the total supply of capital accessible to the minority business sector.

(2) Shifting the emphasis to equity investment vehicles for early stage financing.

(3) Developing black-owned finance companies focused on black-owned firms.

When compared to nonminorities, black-owned firms are less likely than white-owned businesses to have commercial loans.

The conclusion of the study suggests that within the African American community, the importance of wealth creation and accumulation must be legitimized to develop a business infrastructure that will address the many issues of the black community.

The Milken Institute/MBDA study was the subject of the most recent BLACK ENTERPRISE Board of Economists meeting (see "Capital Ventures," June 2000). BE Economist Andrew Brimmer, president of Washington D.C.-based Brimmer & Co., asserts, "If the issue is lending, reflect on how it is done in bank lending. The banks don't sit and wait for potential borrowers to show up. The principle marketing approach in commercial banking and lending is a calling officer who actually goes out to recruit borrowers. They literally recruit borrowers. From the point of view of the bank lending to minorities, they need to have more calling officers who go out into these minority communities and look for opportunities to lend."