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News & Press: Chairman's Message

Chairman's Message: March 2017

Friday, March 24, 2017   (0 Comments)
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Dear members and friends,

¡Saludos!

Before I share some great news, I wanted to let you know that earlier this month, our executive committee met with the Southern Maryland Minority Chamber of Commerce’s (formerly the Southern MD Black Chamber of Commerce) Chairman and Board of Directors to discuss ways of strengthening our existing Memorandum of Understanding. Both of our chambers share similar goals, particularly in the area of legislation, as minority businesses tend to face similar challenges. This is an area where we will be cooperating more closely and share our resources to maximize our voice and thus, the impact that we have in Annapolis.

Now to the great news! The MDHCC’s BAM! Program was awarded $5,000 from the U.S. Hispanic Chamber of Commerce (USHCC). You can read the press release here. These prestigious grants are given to USHCC “chamber members who have demonstrated an enduring resolve to support local Hispanic business in their development and success in innovative ways.” The specific MDHCC program, which won the award, was our newly minted BAM! Program.

BAM! facilitates connections and eventually contracts between our larger corporate members and members who own small to mid-size businesses. In addition, BAM! matches business owners with seasoned veterans and senior members of the MDHCC for one-on-one coaching, advocacy, and connections. For more information on this program, please contact Gigi Guzman, BAM! Committee Chairman, at info@mdhcc.org or visit www.mdhcc.org/page/bam.

Lastly, the Federal Reserve Board voted to raise its overnight lending rate (federal funds rate) target by another quarter point. This is the third time the target rate has been raised since the Global Financial Crisis. For Hispanic Businesses, this means further tightening of available net capital as interest rates on lines of credit, mortgages and other rates tied to the federal funds rate. Though the short-term outlook is not catastrophic, it is troubling to see any sort of tightening in available net capital for Hispanic businesses. Traditional banks are not incentivized to lend to Hispanics. We present a different risk profile and often, an incomplete portfolio of credit worthiness “proof.”

Banks grossly neglect Hispanic owned businesses despite the fact that Hispanic owned businesses are opening at a rate of 15x the national average. According to the U.S. Small Business Association, less than 6% of SBA 7A Loans, one of the most popular small business loan programs, are given to Latinos. Furthermore, there is enough scholarly research that suggests discrimination in lending among African Americans and Hispanic loan seekers, opening the doors to predatory lenders as the only viable alternative.

I spoke of the PLUM initiative last month. This program will bring much needed innovation in lending for underserved communities and the MDHCC is in a leadership position to guide the implementation of the program in Baltimore. In addition to serving on PLUM’s steering committee, I am honored to have been invited to be part of the 2017 Milken Institute Global Conference in L.A. where I will be representing our businesses and conveying the urgent need for a targeted approach in outreach and loan underwriting for Hispanic small businesses.

Have a great beginning of spring! And, if you missed our Q1 Membership Orientation & Economic Outlook Breakfast, make sure you register for our Q2 breakfast in April: http://www.mdhcc.org/event/q2-breakfast.


Onward!



Jorge Eduardo Castillo
Chairman
Maryland Hispanic Chamber of Commerce
Chair@mdhcc.org

 


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