Helping companies that ‘keep the country going’: Small businesses can narrow racial wealth gaps and save the U.S. economy, says microlender’s CEO

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'We believe moral collateral is more important than fixed-asset collateral.' This microlender's CEO says small businesses can narrow racial wealth gaps and save the U.S. economy. levisu interviewed her for the Value Gap, a series about inequality:

The owner of World Empanadas, who started the Burbank, Calif.-based business in her mid-50s after being laid off from the financial-services industry. The Black entrepreneur who started Mosaic Global Transportation, a shuttle business in Silicon Valley. A Mexican immigrant who went from selling tamales door-to-door to selling them at the Golden State Warriors’ new high-tech arena.

The organization’s work is vital because “small businesses are second only to homeownership as the source for building wealth in this country,” Urrutia said in an interview with MarketWatch, during which she also discussed how small businesses are being affected by the COVID-19 pandemic and the economic crisis it has sparked.

We also take into account the owner’s moral collateral. A lot of lenders will not lend if the borrower doesn’t have collateral like a car or a house. We believe moral collateral is more important than fixed-asset collateral. Prior to COVID, we had 93% historical repayment rates, which is extraordinary. We had a 94% business-survival rate, almost twice that of the national average.

Urrutia: It doesn’t matter what study you look at — businesses owned by women, people of color and immigrants have been most impacted at this time. Thousands of businesses in the Bay Area are gone. Color of Change and UnidosUS found that only 12% of Black and Latinx small-business owners got [the Paycheck Protection Program loans] they asked for.

But if something were to happen again in September or October, it would be totally devastating. They have depleted and gone through savings, family resources, everything they had. Urrutia: Small businesses employ half of the workforce and create 64% of new jobs. It’s second only to homeownership as a source of building wealth in this country. It’s critical because of wealth inequality.The Harvard Business Review said immigrants are twice as likely to start businesses as U.S.-born residents. Yet often these days immigrants are vilified.The pay gaps in gender and race persist. It will take over 200 years to close the gender gap. We don’t have that much time.

 

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levisu Marketwatch is censoring comments that are negative to republicans. When a negative comment is made on reps i got a warning that it was against policy. When I made a negative comment on dems no such warning. Not surprising. Marketwatch is owned by Rupert Murdoch and Fox Noise.

levisu

levisu Reparations for black Americans mandatory period BlackAmericanLivesMatter

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