How Does the SBA Help Hispanic Businesses?

The U.S. Small Business Administration (SBA) has a mission to help entrepreneurs and small business owners by providing counseling, capital, and access to government contracting.

During the coronavirus pandemic, the SBA stepped in to provide financial assistance and information to small businesses suffering financially, helping them get back on their feet and out of the crisis.

Abasto Magazine interviewed Mike Arriola, SBA District Director in North Carolina, to learn how the federal agency supports small businesses and what recommendations it offers to help Hispanic entrepreneurs access government assistance.

The SBA has 68 district offices across the country, many of them with bilingual staff to serve the non-English-speaking community.

Mike Arriola, District Director North Carolina District Office, U.S. Small Business Administration.

Abasto Magazine: There is no doubt that, in the last decade, minority-owned businesses, and especially Hispanic-owned businesses, have grown exponentially in the U.S. What role has the SBA played in this positive growth?

Mike Arriola: The growth of the Hispanic community in the U.S. is reflected in the growth of SBA lending, counseling services, and federal contracting opportunities for Hispanic-owned businesses.

 The SBA does three basic things, access to capital through SBA loans, federal contracting opportunities to help small businesses take advantage of federal contracting opportunities, and counseling and training.

SBA offices do a fair amount of counseling and training for small businesses, but most of our counseling and training is done through the resource partners we sponsor around the country.

One of them is called SCORE, the service that used to be known as Service Core of Retired Executives. Now we say SCORE because it’s not just retired people, but people active in businesses. This is a volunteer group of mentors, men and women from all walks of life who volunteer their time to help mentor and train small business owners throughout their life cycle, whether they want to start or stop their business.

Another counseling and training resource is the Small Business Development Center System (SBDCS). There are SBDCSs throughout the country. These centers are staffed with full-time paid counselors and generally, but not always, tend to focus on existing businesses that need specialized assistance. For example, doing business with the government or exporting or commercializing technology has also grown.

We also sponsor a network of women’s business centers around the country, and, finally, there’s a network of veterans’ business assistance centers around the country.

So, as the Hispanic community has grown, our network of resource partners has also grown to help serve them. In many cases, you’ll find that there’s a lot of intersection between the women entrepreneurs they mentor and the Hispanic community as well. For example, here in North Carolina, many Hispanic women receive mentoring at our women’s business centers.

AM: When a Hispanic entrepreneur wants to open, for example, a restaurant or a grocery store, how can the SBA provide support?

MA: For regular lending purposes, our SBA 7(a) guarantee program is probably the best known. We don’t lend the money ourselves, but we provide a government guarantee for a loan that people would apply for a participating lender. That lender can be a bank, credit union, or community financial institution. 

In terms of Hispanic access to this capital, our guarantee is what really makes these institutions want to make the loans to Hispanic entrepreneurs. So having us as a co-signer is a solid point in their favor.

The SBA also has microloans, which are smaller types of loans, usually up to about $50,000, where we lend the money at very low-interest rates, and these lenders lend it to as many small businesses as possible.

AM: How easy is it for a small business owner to get a loan?

MA: One of the things that the SBA has today is an online portal called Lender Match, where you go online to match and type in, who are you, what type of loan do you want, what kind of business for, what purpose? Then you click the button, and then you get all these returns from lenders who would be interested in giving you a loan.

The second step is to get the application going, so make sure you have a decent credit history level. Check out some of our resource partners like SCORE if you need help. They may be able to give you some advice, but some consumer or credit organizations and non-profits may help you.

Make sure you have a business plan. As the applicant, you will submit it to the lender you choose. Often, the lender will accept it by email, or you can upload it to their portal, but today almost everything is electronic, especially with today’s pandemic environment.

Related Article: SBA to Open Applications for $28.6 Billion Restaurant Revitalization Fund

AM: What can we expect in 2022 concerning what’s in store for small businesses?

MA: I have high expectations for 2022, but to get there, we have to put this pandemic behind us. Yes, way behind us, and we all have a stake in a healthy city, we all have a stake in our state being healthy and our country being healthy because the sooner we put this pandemic behind us, the sooner we can get back to taking care of business. So we need to make sure that we all get vaccinated.

But looking ahead, I am pleased to say that we are already seeing some very hopeful signs of a return to normalcy. My office’s phone lines and emails are starting to shift away from questions about COVID relief loans to focus more on how I can create a business? Or where can I get help with a business plan? Or where can I get help with a business plan? Or can you tell me about other sources of funding?

I see a lot more of that, and I would venture to say that my colleagues and the other 67 district offices across the country are also experiencing very positive signs that people want to get back into businesses.

I could foresee this being a continuing pattern to the point where more types of regular SBA loans and more types of advisory services are being sought.