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The U.S. Minority population today is larger than the population of 93% of the world’s countries.
The Minority population will account for nearly 90 percent of the total 131 million growth in the U.S. population from 1995 to 2050.
The Minority population will most likely pass the non-minority population after 2050.
Minorities today account for $1.3 trillion, or 20% of the U.S. total $6.5 trillion purchasing power.
Minorities Grow in Importance
Increasing Role of Minorities in the Labor Market
Labor Supply Constraint
Since the 1970s, the U. S. workforce growth rate as been declining--from 2.7% in the 1970s, to 1.6% in the 1980s, to between 1.0-1.5% today. Projections over the next decade predict continued low rates of increase.
Meanwhile, by 2020, 70% of the workforce growth will occur among minorities.
Unless this workforce can be tapped, the lack of labor will act as a brake on economic growth.
Small Business’ Sources of Financial Services by Sales Percent Fiscal Year Sales (Thousands) *thrift (savings institution, credit union); **finance company, brokerage, leasing company, other; ***family and individuals, other businesses, government
Small Business’ Sources of Financial Services by Ethnic Group Percent
Small Business’ Uses of Financial Service Products by Sales Fiscal Year Sales ($Thousands) Percent *checking, savings; **credit line, mortgage, vehicle, equipment, capital lease, other; ***transaction, cash management, credit-related, brokerage, trust and pension
Small Business’ Uses of Financial Service Products by Ethnic Group Fiscal Year Sales (Thousands) Percent *checking, savings; **credit line, mortgage, vehicle, equipment, capital lease, other;
Small Business’ Uses of Financial Service Products by Ethnic Group, cont. Percent *Transaction services, Cash management, Credit-related, Brokerage, Trust and pension. ** excludes proprietorships
BridgeNotes are subordinate-lien, “companion” loans developed by the Capital Access Group and designed to “bridge” the gap between the amount a bank is willing to lend and the small business borrower’s total financing need.
Bridge Notes will:
Increase bank lending to low-income communities.
Increase community-lending capacity.
Increase availability of data on loans to under-valued businesses.
Transaction Diagram ($1,000 loan) BridgeLine Company Trust Bank 1. Advances $1,000 2. Signs $750 senior note and $250 junior note; pays 2% insurance fee. 4. Gives $788 for senior note 3. Sells $750 senior note Retains $250 junior 5. Transfers $250 note and $58 fee 6. Sells bonds; gives $250 cash
Innovations Breaking up the Value Chain: Micro-enterprise Training and Financing Program
USC Business Expansion Network, Liberty Hill, California Community Foundation and CalFed Bank team up to tap the untapped market.
MTFP will provide loans to small-scale businesses which require less than $10,000 of investment capital.
USC BEN has a 14-year history of cultivating entrepreneurship and will provide mentoring to the borrowers.
California Community Foundation covers the cost of full time staff at USC BEN.
Liberty Hill has a stake in promoting social and economic development in low-income communities and will share the risk with CalFed.
CalFed Bank is able to provide the mechanics of loan processing, securitization, funding, and monitoring.