WASHINGTON, D.C. – The U.S. Census Bureau has released preliminary estimates from its 2002 Survey of Business Owners (SBO) indicating that minority groups and women are increasing business ownership at a much faster rate than the national average. Overwhelming increases in minority business ownership parallel the demand for SBA loan products in these communities.
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The SBA’s flagship 7(a) loan program has registered sharp increases in loans to women and minority-owned businesses during the first three quarters of fiscal year (FY) 2005. Loans to minorities have increased by 27 percent, compared to the same period in FY 2004, and loans to women have shown an increase of almost 50 percent, followed closely by loans to African-American business owners, which are up 46 percent. SBA loans to start-up companies have increased by 76 percent over last year.
“These newly released census estimates and our own loan figures validate what I see in the communities I've visited all across the country,” said SBA Administrator Hector Barreto. “Minority and women entrepreneurs are leading the way in business growth and are making important contributions to our nation’s economic strength. This impressive growth in business ownership, and the clear-cut benefits that result from it, is what President Bush refers to when he talks about the ownership society.”
According to the SBO, the number of U.S. businesses increased by 10 percent between 1997 and 2002 to 23 million. At the same time, the rate of growth for minority- and women-owned businesses was far higher, ranging from 67 percent for native Hawaiian and other Pacific Islander-owned businesses to 20 percent for firms owned by women.
There were 1.2 million black-owned businesses in 2002, according to SBO reports. This is up 45 percent from 1997. Thirty-eight percent of black-owned firms operated in the health care and other service industries; health care and retail trade accounted for a fourth of their receipts. Geographically, black-owned businesses account for 12 to 15 percent of firms in Maryland, Georgia, Mississippi and Louisiana and a quarter of the businesses in Washington, D.C. were black-owned.
Hispanic business ownership also increased significantly since 1997. There were 1.6 million Hispanic-owned businesses in 2002, up 31 percent over five years. According to the SBA, about 40 percent of Hispanic-owned firms were in administrative, support and waste management; health care; and other service industries while 13 percent were in the construction industry. Hispanic-owned firms claimed between 15 and 22 percent of businesses in New Mexico, Texas, Florida and California.
2002 reports also show that the number of women-owned businesses increased 20 from 1997 with a total of 6.5 million firms owned by women. More than half of those firms were in service-related industries and receipts were highest for wholesale and retail trade activities among this group.
The Census Bureau’s Survey of Business Owners defines business ownership as having 51 percent or more of the equity, interest or stock in the business. Respondents to the 2002 SBO were asked to report the percent of ownership, gender, Hispanic or non-Hispanic origin and race for up to three primary owners.
Separate reports for minority- and women-owned businesses are expected to be issued over the next year and will include more detailed date on the number of firms, sales and receipts, number of paid employees and annual payroll. Data also will be presented by geographic area, industry and size of business. For information on these and other minority segments including business ownership among Asians, Native Hawaiian or Pacific Islanders, and American Indian and Alaskan-Natives, visit the news release on the survey by clicking here.