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Monday, May 20, 2024

Emerging Businesses

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Madame C. J. Walker, whose line of haircare products for Black women that made her the first female self-made millionaire, started her business mixing items from the drugstore in her kitchen.

Ann Lowe, now considered one of the most significant fashion designers in American history, designed Jackie Kennedy’s wedding gown – although as a Black designer, she did not receive acknowledgment for it at the time. Ms. Lowe began her career making dress patterns in her childhood home.

Even George P. Stewart and Bill Porter started a two-page church bulletin that today hails as the top African-American publication in the nation – the Indianapolis Recorder.

These inspirational entrepreneurs inspire us with their tenacity, spirit, and perseverance. But they also serve as a valuable reminder: many of the most successful businesses start small.

May was Small Business Month, an opportunity to recognize the ways small businesses contribute to our community. But we shouldn’t just wait for one month a year to reaffirm our commitment to small businesses.

In Indianapolis and across the country, small businesses are the backbone of the economy. They drive local jobs, careers, and opportunities. They allow for the chance to achieve the American Dream, providing more avenues to generate income. And they make up a significant portion of overall economic activity. Studies show that small businesses generate 44% of economic activity – in the entire United States.

Within the category of small businesses, there is another classification that deserves our attention as well: emerging businesses.

To be certified as an emerging business enterprise, a company must be 10 percent or less the size of the current Small Business Administration (SBA) designation for a small business, which is typically capped at 500 employees.

Emerging businesses face obstacles that are distinctly different from more well-established small businesses. For example, they often have trouble securing federal contracts, and many emerging businesses have difficulty accessing the capital they need to develop products and hire workers.

That’s why I introduced the Emerging Business Encouragement Act, which would create a new designation based on the company’s age, size, and total compensation.

Under the Emerging Business Encouragement Act, the SBA would create a new designation for an Emerging Business Enterprises based on the company’s age, size, and total compensation. This will encourage meaningful opportunities among like-sized enterprises compared to competition against larger, fully established enterprises.

My bill will expand opportunities by requiring federal agencies to set contracting goals for emerging business enterprises equal to or not less than 3 percent of contracts and subcontracts. 

Under the Emerging Business Encouragement Act, the percentage of federal loan guaranty authority for Small Business Administration loans would increase from 50 percent for all small businesses to 65 percent for emerging business enterprises, providing a significant incentive for lenders to lend to these businesses.

We must support all job creators as our economy continues to recover, but there are significant differences between a startup with only a few employees and an established business with a few hundred employees and decades of experience. This legislation will help these emerging businesses overcome the unique challenges they face in their first few years of operation, and it will ensure these businesses are able to compete for federal contracts and gain access to critical small business loans.

With this bill, we can help entrepreneurs get through their first few years, when so many businesses fail, so they can grow and create jobs. And it provides incentives for lenders to provide capital to emerging businesses, one of the top concerns for entrepreneurs.

For the Black community, the opportunity to have successful, sustainable, self-owned businesses is invaluable. Not only do Black-owned businesses help generate wealth for the owner and their family, but Black business owners are also statistically more likely to hire Black employees. Put simply, Black businesses are good for the Black community.

But Black entrepreneurship means even more than that. In a country where establishing our own fate has been out of reach for so long, Black businesses are the key to self-sustainability. They are the key to carving out our own futures, on our own terms.

So many before us did just that. But it’s also happening all around us, right now. Tamika Catchings and Tea’s Me. Danny Portee, whose Professional Management Enterprises placed him in the running for National Small Business of the Year.

All around us, Black entrepreneurs are succeeding. And I’ll continue working to ensure they have all the tools at their disposal to do just that.

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