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Notice

Minority Business Financing

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AGENCY:

Minority Business Development Agency.

ACTION:

Notice.

SUMMARY:

The Minority Business Development Agency (MBDA) is soliciting comments on the direction of minority business financing. MBDA would like to ensure that it has obtained broad-based feedback on this issue. Once this information has been obtained and there has been a preliminary discussion of this issue at MBDA's 2003 MED Week conference, MBDA will finalize and print a report with any appropriate revisions, and will disseminate it widely to the policy-making and financial communities. In order to be considered, comments must be received by the deadline contained in the Dates section of this Notice.

DATES:

All comments must be received or postmarked by October 7, 2003.

ADDRESSES:

Completed comments may be mailed to the following address: Ms. Anita Cooke Wells, Chief, Office of Business Development, HCHB, Room 5063, Minority Business Development Agency, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; ore-mailed to: awells@mbda.gov.

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FOR FURTHER INFORMATION CONTACT:

For further information, contact Ms. Anita Cooke Wells, Chief, Office of Business Development, at (202) 482-1940.

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SUPPLEMENTARY INFORMATION:

In May, 2002, MBDA began to examine the challenges facing minority firms in obtaining financing and develop proposals to improve financing options. MBDA sought input from persons having expertise in these issues, to assist it in information gathering and review of possible options. Some of the areas identified for discussion were the current disparities in financing minority businesses, the lack of available data, and the importance of management and technical assistance.

The Agency has developed preliminary proposals as a result of this process. These proposals address issues universal to all minority firms, as well as specifically focusing on issues relevant to high growth businesses, emerging companies and microenterprises. These proposals are designed to support the development of minority businesses and result in job creation and other economic outcomes. Much of the Agency's work focuses on suggestions that would affect existing businesses, whether middle-market or larger businesses and those firms with the largest potential for growth. These businesses are most likely to generate employment and revenues, yet often are overlooked by small business financing programs, venture capitalists, and institutional investors.

The lack of information on minority firms reiterates the need for the Federal Government to develop and provide this data to the private sector. In general, the issues focus on the following four categories:

1. Development of Current and Extensive Governmental Data To Support Investment Decision-Making and To Identify Market Opportunities in the MBE Community

  • Implement an Annual Survey of Minority Businesses to provide up-to-date and accurate information on the minority business community.
  • Organize and fund a national minority financing network and data repository, which would compile information on the loan performance of this sector of the business community.
  • Partner with the National Association of Investment Companies to collect data on portfolio performance of minority-focused venture funds and develop institutional investor strategies. Start Printed Page 55033

2. Improvement of Capital Availability and Accessibility Through Existing and New Programs

  • Continue ongoing federal financing programs, such as the Small Business Administration 7(a), 504 and Community Express programs and the Department of the Treasury's Community Development Financial Institutions Fund that have increased capital accessibility for minority businesses and other under-served communities.
  • Implement a National Capital Access program, which allows banks and other financial institutions to make loans to higher-risk borrowers.
  • Develop a national mezzanine-financing program.

3. Provision of Expanded Access to Management and Technical Assistance

  • Tie existing and new financing vehicles to technical and management assistance appropriate for the type of firm receiving the financing.
  • Focus provision of services to businesses with $100,000 or more in annual revenues, as businesses of this size are responsible for approximately 95 percent of all employees retained by minority firms and nearly 92 percent of minority business revenues.
  • Develop tiering mechanisms for provision of management and technical assistance services promoting increased efficiency and innovation within the minority business community.
  • Create best practices and performance measurements for service providers.

4. Integration of the Investment Community, Minority Entrepreneurs, and the Federal Government

  • Coordinate federal programs supporting minority business financing and increase minority business utilization of these programs.
  • Support existing mechanisms for integrating entrepreneurs with financial institutions, especially with respect to venture capital.
  • Promote increased collaborations between institutions with experience and expertise investing and lending to the minority business community and mainstream institutions.

For additional background on MBDA's proposals, please go to MBDA's Web site at http://www.mbda.gov. In particular, the Agency would like to receive any suggestions on additional approaches or options that may be included in a final report. If respondents believe that the identified issues are impractical or present serious difficulties in implementation, please note this in the comments.

The comments received will be reviewed for applicability to the issues addressed. MBDA will consider only those comments that address (1) existing successful models that could be enhanced and replicated, and (2) where there is sufficient interest within MBDA to adopt the comments, or there exists the likelihood of creating such interest. If any comments received meet the criteria, they will be included within the final report.

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Dated: September 16, 2003.

Ronald N. Langston,

National Director, Minority Business Development Agency.

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[FR Doc. 03-24083 Filed 9-18-03; 12:01 pm]

BILLING CODE 3510-21-P