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Room for Improvement in Support of NC Minority-Owned Businesses

A new report says North Carolina has room for improvement in its support of minority-owned businesses. (NCRC/Flickr)
A new report says North Carolina has room for improvement in its support of minority-owned businesses. (NCRC/Flickr)
August 24, 2017

RALEIGH, N.C. – There are more than 180,000 minority-owned businesses in North Carolina, but growing and sustaining this business isn't easy. This long-held claim by business owners is confirmed in a new report by the North Carolina Budget and Tax Center.

Policy analyst for the North Carolina Justice Center, William Munn says on average, even when they do qualify for a loan, minority-owned businesses receive half of the funds their white counterparts receive.

"It's really hard for minority businesses to secure loans and when they do secure loans, they're for lesser amounts and then, for higher interest rates," he explains. "Minority businesses have less capital from which to pull from."

According to a University of Michigan study, among businesses with annual sales over $500,000, 41-percent of the minority-owned companies received loans, compared to 52 percent of white-owned businesses. The report recommends more outreach to minority business owners to ensure they're aware of the resources available and creating a state fund for small-business lending.

For almost 20 years, North Carolina has operated a Historically Underutilized Business or "HUB" program, but the rate of participation varies by county - ranging from only one to three percent. Munn says it's hard to ensure that minority-owned businesses engage in the process.

"We found that there's a very healthy base throughout the state, and they just don't know or aren't really seeing the return on investment," he adds. "They don't see it worth their time to be engaged."

Once businesses are certified as HUB vendors, they're offered greater exposure to opportunities such as state contracts. The report also recommends simplifying the certification process.

Stephanie Carson, Public News Service - NC