Hispanic Companies Not Qualifying For Business Loans
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UPDATED: Sep 19, 2012
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Hispanic business owners across the country say that they want to hire more employees but cannot due to the lack of small business loans available to them, reports Southern California Public Radio (SCPR).
Roberto Barragan, president of Valley Economic Development Center, told SCPR that he knows small businesses strewn across the state that want to hire as many as 20 employees. However, they wind up only bringing in one or two employees due to their inability to receive financing.
“Unfortunately, in Los Angeles, with 12 percent unemployment, we can’t afford (just) one or two jobs,” said Barragan at the United States Hispanic Chamber of Commerce convention in Los Angeles.
Frank Garcia, an owner of a company in New York, said he tried to get a $100,000 business loan four years ago. He said that he would’ve used that money to hire 20 more employees, but instead his application was denied.
This form of alleged commercial red lining has Hispanic business owners about their very existence in the industrial world.
“It’s very volatile,” said Garcia. “[In New York] 20 to 30 businesses a day are closing down.”
Despite these claims, however, banks are saying actual commercial loan lending trends are quite the opposite.
“There is money out there and we are lending money,” said Mike Galvez, a Wells Fargo vice president and business banking manager, at a convention panel.
SCPR said Wells Fargo made $7.4 billion in new business loan originations in the first half of 2012.
The government has also stepped in to help Hispanic entrepreneurs by announcing a new pilot program sponsored by the Small Business Administration (SBA). The SBA hopes to connect local lenders with Hispanic business owners in addition to providing owners with financial counseling.
“The SBA is having a powerful impact in this sector, with a billion dollars in loans to Hispanic-owned businesses last year alone. The pilot program we are announcing today will help us do better,” said Karen Mills, an SBA administrator, in a release.
The new SBA business loan program will be available to Latinos in Texas, Tennessee, Pennsylvania, Florida, California, Ohio, and Utah.