SBA Pledges to Double Loan Guarantees to African Americans

Vice President Al Gore and Small Business Administration Administrator Aida Alvarez on Tuesday announced a goal to double yearly loan guarantees to African American businesses by 2000.

The pledge was the second in a series of commitments to underserved communities. In October, Alvarez vowed to triple annual loan guarantees to Latino-owned businesses by 2000.

“African Americans comprise only 3.6% of the total number of small businesses in this country, and the population is 12.6% of the country,” she said. “We have to capture the entrepreneurial activity and make it possible for them [to grow].”

The SBA provided $286 million in loan guarantees to African American businesses in 1997. Under the new goal, guarantees would increase to $588 million in 2000. The total over the next three years would reach $1.4 billion. Promised loan guarantees to Latino businesses over the same period would reach $2.5 billion.

It is now up to lenders to make the SBA-backed loans, and to community organizations to help spread the word among needy businesses. To that end, SBA officials signed agreements with half a dozen African American organizations, including the National Urban League and National Black Chamber of Commerce.

Money to meet the new goals is not earmarked in the agency’s budget. SBA spokesman Mike Stamler said the bulk of the funds will come from the 7(a) loan guarantee program--the agency’s largest lending program.