Loan Guarantees for African Americans

In an effort to increase the number of black-owned businesses, the U.S. Small Business Administration announced a plan this month to double the annual level of loan guarantees to African American entrepreneurs over the next three years.

Blacks own only 3.6% of the small enterprises in the country, but make up 12.6% of the population. In order to get the word out, the SBA will use banks and black organizations such as the National Urban League and the National Black Chamber of Commerce. “Now if individuals want to apply for those loans, they will have the information, and can attend classes so they will be bankable,” said Bobby McDonald, president of the Black Chamber of Commerce of Orange County. “This is the carrot we’ve been trying to get. Now, it’s reachable.”

Last year, the SBA promised to triple annual loan guarantees to Latino-owned businesses to $2.5 billion by 2000. Under the new plan, loan guarantees to black businesses would increase to $588 million that year.

“It’s a win-win for everybody,” McDonald added. “It’s a very good opportunity and we have to take advantage of it.”

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Daryl Strickland covers tourism and small and minority business issues for The Times. He can be reached at (714) 966-5670, and at daryl.strickland@latimes.com