Javier Palomarez, President and CEO, U.S. Hispanic Chamber of Commerce
Javier Palomarez shares his perspective on Gallup's report on lending to diverse segments and how it relates to USHCC members.
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At Wells Fargo, we believe that successful small businesses are the foundation of a healthy, vibrant, American community. That's why serving small business owners is one of the most important things we do.
Yet we also know that many small businesses across the country, including those in diverse communities, are still recovering from the great recession. Serving diverse owned businesses is a priority for us, and we know that more needs to be done to help those businesses grow and prosper. It's also clear that we, as well as those who support small business in our country, need to better understand the challenges facing diverse business owners.
For this reason, we turned to Gallup to conduct a study working with the U.S. Black Chambers, the U.S. Hispanic Chamber of Commerce, and the U.S. Pan Asian American Chamber of Commerce Education Foundation. Gallup surveyed diverse business owners nationwide to better understand their motivations for starting a business, their funding needs, and their attitudes towards credit. We learned about how diverse small business owners addressed funding needs and their perception of financial institutions. We heard about their desire for resources, education, and tools to help their business succeed.
In this video, Javier Palomarez, President and CEO of U.S. Hispanic Chamber of Commerce, shares his perspective about the study and how it relates to USHCC members.
I think one of the things that truly resonated with me was that the survey, in a way, challenged some myths. The survey found that the Hispanic community and the entrepreneurial spirit within the Hispanic community is alive and well.
Between the years 2000 and 2010, the USHCC collaborated on a study with an organization called Geoscape, a member of the USHCC, and we looked at the growth of Hispanic-owned firms in this country. And we found that while small businesses in general were trending downward, the exact opposite was the case with Hispanic-owned firms. In fact, Hispanic-owned firms between the year 2000 and 2010 doubled, and it challenges the myth that Hispanics are job-takers. In fact, what we're seeing through this kind of a study, is that Hispanic business owners are job-makers. And that, to me, gets at the root of the potential this community represents.
Clearly, the challenges that America's Hispanic small businesses are facing are access to credit, capital, and contracts. When a business has access to any one of those three or all three, they have an opportunity to invest in the business. They have an opportunity to pitch the business, and they ultimately have an opportunity to grow the business.
One of the cultural nuances that exist within the Hispanic community that sometimes can be a deterrent to a loan conversation is that oftentimes, our Hispanic business owners are either immigrants themselves or one or two generations removed from an immigrant. And those immigrants came from societies, from economies, from countries where the financial services industry was not as established. In those countries, the financial services industries were never interested in talking to our business owners. They never wanted to have a relationship with them.
When you bring that cultural nuance to a setting such as you have here in America, there is a reticence to trust a financial institution. That, in a sense, continues to be a bit of a barrier in the Hispanic business community as it relates to a loan application and ultimately a loan being delivered to one of our small business owners.
I think the best way to address the lack of confidence within the Hispanic business community as it relates to credit possibilities and credit products and services is to educate that community. The Chamber Training Institute is a program that is put on through the United States Hispanic Chamber of Commerce's Foundation. It is 100% funded through an investment from Wells Fargo. The training is put on by Notre Dame University, and we put it on in different cities all over the nation. What we're doing with Wells Fargo through our Chamber Training Institute gets right at that issue.
It teaches the Hispanic business owner what the options are, what the potential is that exists in the marketplace. And it prepares them for that conversation with a banker so that ultimately, they feel more comfortable about having the conversation, and they feel more comfortable and confident about the fact that ultimately, they can get access to credit or that loan that's critically needed to continue to grow the business.
When you invest in a local business, in essence, you are helping create tax dollars. You are helping create jobs. You are helping drive a local economy, and that's the kind of giving that I think is very strategic and ultimately has a multiplier effect that can be felt for years to come. I think this is a wonderful time to be commissioning studies that better understand the needs of our diverse business communities, specifically the Hispanic business community, but certainly all of them.
American small business needs all the help it can get. It is, I think, clearly understood now more than ever that American small business is the engine of the American economy. So the better we understand them, the better we understand their needs, the better equipped we are as this nation, as an economy, as a society of responsible business thinkers to continue the development and growth of that small business community, which is critically important to the continued well-being of our economy.