A call to arms for Black business

Black Enterprise, Nov, 1996 by Carolyn M. Brown, Tonia L. Shakespeare

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Here are five ways to make an impact:

1. Contact congressional leaders and White House administrators through letters, phone calls, faxes and e-mail about key issues affecting black businesses.

2. Join trade associations or small business advocacy groups.

3. Partner or form coalitions with other black businesses and community organizations.

4. Collaborate with black or majority banks that have special programs geared toward minority businesses.

5. Encourage corporations to create internal programs to with firms that value black businesses.

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When Joan Parrott-Fonseca became director of the Minority Business Development Agency (MBDA) at the Commerce Department last year, she was the first woman to head the agency since its creation in 1969 and the third person to assume the post in two years. Fonseca had come from the General Services Administration, where she served as associate administrator for the Office of Enterprise Development.

Today, Commerce is still trying to recover from the death of Secretary Ron Brown this spring. The full ramifications of the tragedy have yet to be determined, with Brown's successor, Mickey Kantor, taking charge amidst hostile fire in this pivotal election year.

Operating under the threat of extinction from a Republican-controlled Congress, Fonseca has refurbished the MBDA's image by forging stronger relationships between minority businesses and the private sector (financial institutions). She has also sought to include as many minority firms as possible on trade missions.

For minority entrepreneurs, MBDA provides fee-for-service management and technical assistance and other business development services, mainly through its Minority Business Development Centers The goal is to establish 100 of these centers nationwide to provide hands-on assistance in such areas as bonding, bid estimation, financing, marketing, franchising and import/export. Center personnel also help firms locate contract and subcontract opportunities with federal, state and local government agencies. For the coming year, MBDA has identified several areas For continued development: capital formation, construction, international trade, rural programs, Internet delivery systems and franchising.

MBDA programs suffer from the perception that they duplicate SBA programs, which is far from the truth Both agencies do serve minority businesses, many of which fall into the small business category However, each agency has a unique mission and range of services.

While MBDA provides help for minority businesses, the S3A, created in 1953 as an independent agency of the federal government, aids, counsels, assists and protects the interest of the entire small business community. It administers a $29 billion loan and $4 billion venture-capital portfolio and a variety of assistance programs. SBA's cornerstone is the 7(a) Guaranteed Business Loan Program, which guarantees bank loans of up to $750,000 to creditworthy small businesses that cannot get the loans otherwise on reasonable terms However, most black businesses have benefited from the agency s microloan and minority prequalification programs; the latter is a way for minority borrowers to "prequalify" for a 7(a) loan before going to a bank or commercial lender Minority businesses have also taken advantage of the 8(a) program, which mandates that federal agencies designate a portion of their contracts for socially and economically disadvantaged small businesses.