Immigrant Small Business Owners Boost Economy – Still Face Challenges25 Mar 2015
As our nation continues its financial recovery following the Great Recession of 2009, Americans are once again enjoying the benefits of a stabilized economy, including lower unemployment rates, better salaries, and an improved housing market in many areas of the country. One important contributor to the recovery that has often gone overlooked is immigrant entrepreneurship. Immigrant-owned small businesses are a fundamental element of the U.S. economy, generating over $700 billion annually and supporting 4.7 million employees. But such entrepreneurs often face unique challenges when trying to start businesses in the United States that can threaten their chances of investing in this nation. [See How Small Business Immigrant Entrepreneurship Can Boost Economic Growth, by Paul McDaniel, Immigration Impact, 11.March.2015.]
By 2010, the number of small business owners grew to more than 4.9 million, with 30 percent of those businesses owned by immigrants. The rise of immigrant-owned small businesses at the end of the last decade provided a badly needed economic jumpstart that helped our nation begin to pull out of the recession. Despite their significant contributions to the post-recession recovery, however, immigrant small business owners still find themselves struggling for financing from many banking institutions. A report issued in March 2015 by the Bread for the World Institute, a nonprofit that aims to end global hunger, details how many foreign nationals must rely on personal savings to build their businesses because traditional banks generally don’t market loans or credit cards to the immigrant community. “Financial organizations haven’t done much outreach,” says Alex Orozco, community development officer for the city of Des Moines, Iowa, which was one of the areas studied for the report. “Immigrant owned businesses haven’t had any access to business lending, including credit cards. They have been relying on their own savings or coming together as a family.” Lack of support from the banking industry is compounded by the various other hurdles commonly faced by immigrant entrepreneurs, including immigration challenges, language barriers, and socioeconomic conditions. [See Harnessing Immigrant Small Entrepreneurship For Economic Growth, by Andrew Wainer, Bread for the World Institute Briefing Paper, March 2015.]
One subset of the immigrant population is particularly affected by the multitude of challenges faced by immigrant entrepreneurs – women. As of 2013, there were 13.1 million female immigrant workers in the United States, comprising over seven percent of the total workforce. However, the majority of working immigrant women are concentrated in low wage occupations, with half of them making under $30,000 a year. Although female immigrants arguably have the most to gain from the upward mobility offered by entrepreneurship, they must also overcome financial roadblocks that prevent them from adding more earning power to their respective family units. “I meet a lot of women who had this thing they wanted to make money doing, by selling food or making clothing,” says Ana Mancebo, program coordinator at Solidarity Microfinance, a nonprofit focused on helping communities create economic opportunities. “But there was just no way for them to do that because their option would be take out a large loan at a bank and that’s something they just couldn’t afford to do.” [See How Immigrant Women Contribute to the U.S. Economy, by Walter Ewing, Immigration Impact, 9.March.2015.]
Immigrant small business owners offer an invaluable contribution to our nation’s economic resurgence. But they need help. Immigrants need improved access to startup capital, as well as the chance to learn basic business skills, in order for their dreams of entrepreneurship to become a reality. And we owe it to them to expand our support in their pursuit of small business ownership and a piece of the American dream. The prosperity of our country, and of future generations to come, depends on it.
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