Main Street Monday – Supporting Immigrant Entrepreneurs Benefits Overall Small Business Economic Outlook
October 28, 2019
By Mary Miller
Contributing Editor, Main Street Monday
Main Street Monday – Supporting Immigrant Entrepreneurs Benefits Overall Small Business Economic Outlook
According to Harvard Business Review, immigrants are two times more likely to become entrepreneurs than native-born U.S. citizens. However, recent SBA statistics indicate that immigrants currently account for only 28% of small business entrepreneurs.
In an article originally published on La Opinión, Luz Urrutia, draws on her own personal experience to explain how small business lenders can help strengthen immigrant entrepreneurship:
Mindset Shift
Immigrant-owned small businesses provide goods and services to American consumers every day. Therefore, supporting immigrants in their efforts to start small businesses in the U.S. would lead to greater overall prosperity for the entire country. Urrutia explains that a change in mindset from immigrants “taking American jobs” to “creating American jobs” would help to foster economic growth.
Eliminate Barriers
Urrutia states, “Silicon Valley, my home base, is awash in concern over newly tightened quotas and the increased difficulty of hiring H-IB workers. Recently the American Immigration Lawyers Assn. (AILA) released an analysis of Citizenship and Immigration Services data showing the agency’s slowing pace processing applications. The AILA found that overall case-processing times increased by 46% over the last two fiscal years, even though the agency received fewer applications for review last year.”
Innovative Capital, Financing Options
A challenging hurdle for any small business is the ability to access capital and secure financing. Due to a lack of credit history or collateral, it is even more difficult for immigrant-owned start-ups. Urrutia states, “With immigrants, you can overcome a lack of credit file and/or collateral by using alternative data sources and technology, developing expertise in evaluating cash flow for businesses where the bookkeeping is not perfect, and by using a culturally competent staff to evaluate the “moral” collateral of these borrowers. Our track record shows this methodology works. We’ve maintained a 95% repayment rate for 25 years, and most of the 11,000 businesses my company has backed are owned by immigrants or run by the children of immigrants.”
Urrutia believes that with the right mindset, support, and financial assistance, immigrant businesses can create local jobs, contribute to economic growth and build strong, successful businesses.