Remarks by Vice President Harris in a Moderated Conversation on CDFIs and Small Businesses
A.J. Fletcher Opera Theater
Raleigh, North Carolina
1:31 P.M. EST
MR. BUZO: Okay. Well, hello, everyone. Thank you for being here. And, well, thank you for the leaders who are here and bringing us together to discuss this important — very important topic.
In my role in Univision North Carolina, in news, I have a special focus on community empowerment. And owning my small business and empowering, I’m so glad to be here today. Thank you.
THE VICE PRESIDENT: Thank you.
MR. BUZO: Well, Madam Vice President, my first question is for you. Why is supporting small business a priority for you?
THE VICE PRESIDENT: First of all, thank you, Jorge, for being here and moderating this conversation and for your voice. There’s so much about this issue that is about making sure that people are seen and heard, and that their voices are respected, and that we have policies that promote the natural resources and capacity of community.
And the kind of work that you do highlights the importance of that every day. So, thank you. It’s good to be with you and these incredible leaders.
And, Marla, thank you so very much for that introduction and all you do.
Small businesses. So, I love small businesses for so many reasons. You know, I grew up — my mother raised my sister and me — Maya and me — and — but she would work long hours and long days and — and on weekends, from time to time.
And so, we also had a second mother — someone that we consider a second mother — Mrs. Shelton, who lived two doors down from us growing up. And we lived on the — we lived in the apartment above Ms. Shelton’s nursery school.
She was a small-business owner. She had this nursery school, and she not only took care of the kids in the community, she took care of their parents. You know, there would — invariably, I would notice her sitting in the corner talking with a mother who was going through challenges. She was a community leader. She hired locally. She mentored.
And that was my first experience with — I never thought of her as a small-business owner. She was Ms. Shelton. She was our second mother. But that’s the nature of who runs, starts, and owns our small businesses in the community.
They’re not only business leaders. They’re community leaders. They’re civic leaders. They’re role models. They’re the one who sponsors the local softball league. They’re the one who sees the kids in the community growing up and will mentor them or give them feedback or advice.
They’re the ones who, you know, for us, as adults, if you go in, whether it’s a restaurant or a dry cleaner, and will say, “How’s your day? Why are you looking a little down today? Let me put some food in you that I know you like to eat.” This is who our small businesses are.
And — so that’s how we feel about them, how we experience them. And small businesses employ half of America’s workforce, either as the owner of or as an employee of.
Small businesses are contributing to the economic health of our nation in a profound way. We’re here with an emphasis today to talk about Latino- and Latina-run and -owned small businesses. Well, they represent at least 5 million businesses in the United States and contribute — on an annual basis, the estimates are $800 billion a year. (Applause.)
So, when I think of small businesses, I think of it in — in two ways, predominantly, about what we must do to support small businesses and what we must do to support small-business owners.
And that means taking into account the incredible work that is being done by so many of the leaders who are here — and, of course, our Administrator Guzman — around what we should do to address the barriers that can — very much prohibits that person that we just talked about from actually contributing because there might be language barriers. There are barriers in terms of financial literacy. There are barriers in terms of just not knowing where to go and how to apply for loans and access to capital — things that have nothing to do with the capacity of that individual and nothing to do with their spirit of innovation and ambition, which is also something I love about our small-business owners, because they believe and they see and they work hard around the clock. That is not a nine-to-five job by any stretch.
And so, those are some of the reasons.
MR. BUZO: More than a job. Yeah, absolutely. Agree with you.
And we have been through a lot these past few years with the economy. People may be interested in starting a small business but then maybe have reservations, you know. Is now a good time for start a business?
THE VICE PRESIDENT: Yes! Now is a good time.
Why? Well, first of all, I’m very proud to be a part of — of some of the work that has led us to this moment, where — when I was in the Senate before I became Vice President, before we were elected — President Joe Biden and myself — when I was in the Senate, we — and together with some others — got $12 billion of federal money to put into the CDFIs, the Community Development Financial Institutions, which we all know as community banks.
And so, the work that we have been doing over the last couple of years has been to maximize the capacity of that additional funding, to increase access to capital. Access to capital: no small matter.
I have met — and, Marla, we talked about this — so many small-business owners, and I’ve traveled around the country meeting small-business owners, who shared with me stories about how when they first wanted to get a loan — also known as access to capital — they’d go to a bank, usually the traditional bank. And almost to a one, they said, “And I heard this word being used to describe me that I’d never heard before.” And I would ask, “What word is that?” And they were told that they are “unbankable.” “Unbankable.”
And so, what ended up happening though — and most of those stories that I’ve had the benefit of hearing had a good ending, because what they then realized is there are other places to go, such as community banks, which are in the community, run by members of the community.
They understand the capacity of the community. They understand the culture of the community, the mores of the community, what the community wants for itself.
And then they look at the whole human being in terms of that small-business owner, and they can see them. So they know what you want to sell, the community actually wants to buy — whether that be a certain style of food or just cultural or just what it needs.
And what ends up happening is the community bank then says, “Okay, let’s sit down and talk about how you apply for that loan. Let’s talk about how you get a line of credit.” Who of us grew up with our parents talking about a phrase “line of credit”? Right?
This is — these are things you learn if someone takes the time to teach you because they know. That’s what community banks do. They then help them understand “This is how you need to think about your capital. This is how you need to think about how you’re going to be able to afford your employees and their benefits.” You get the point.
They sit down and they take the time because they understand the value of the person that’s sitting across that desk, in terms of who they are in the community and what they can contribute to the community.
So, we’ve put more money into the CDFIs. You look at it last — in the last two years, we have, as an administration and leaders who are present at this moment in time — and I know the governor is here, Roy Cooper; I want to thank him always — we have, over the last two years, grown and started, as a country, more small businesses in the last two years than any other two years in the history of the country. (Applause.) That’s the environment.
We have some of the lowest unemployment rates. We are doing the work that is about collaborating around the small businesses that will need to do the work that will be the result of all the trillions of dollars we’re putting into the infrastructure of our country — (applause) — including the almost trillion dollars that we’re going to be putting into a whole new economy that is called a “clean-energy economy.” (Applause.) Right?
This money is about to hit the streets. And so, what we know as an administration is: We want to make sure the folks in the community are going to be able to take those jobs. So, we are investing in the skills development. We are partnering with everyone from community colleges to organized labor to make sure that we are training folks up to take those jobs. That’s all happening right now.
Right now, we are looking at — the Administrator shared with me — I’ll never forget one of the sessions that we had together — that — was it over 75 percent of small businesses that are manufacturing — right? — because a lot of this is about also our administration’s perspective that we need to have domestic manufacturing. Okay?
Well, what the Administrator shared with me — it was an “ah-ha” moment for me, Isabella — was that 75 percent of manufacturing businesses in America have 20 or fewer employees. Right?
So, think about this. We’re about to put all of these resources into building back up the infrastructure of America — roads and bridges. That’s about work that ranges from electricians and engineers to construction workers. Well, the other number that I have tells me that over — I think it’s over 35 percent of construction workers in America are Latino. Right? (Applause.)
MR. BUZO: Right.
THE VICE PRESIDENT: So, I think about that, yes, as — in terms of the worker and that person’s quality of life and are they getting paid their value and all of that.
But I also think about it in the context of a small business — right? — including manufacturing and what that requires in terms of who the workers are and what their familiarity is with what we need to do to build back up the infrastructure, and then coupling all that with an absolute promise that we have made as an administration, which we are seeing through, that over the next now four years, we will increase federal contracts by 50 percent for minority-owned businesses. (Applause.)
So, these are federal contracts we’re talking about. Right? So, when you couple these approaches, which is a comprehensive approach — we’re going to put the resources into building back up. We’re going to — we understand who small businesses are. We understand who manufacturing businesses are. We understand the importance of lifting up community. We understand the importance of federal contracting, because that’s a whole lot of dough that goes into those contracts and paying attention to who’s getting those contracts.
It’s, really, very important. And we think that, therefore, this is a good time. (Laughs.) (Applause.)
MR. BUZO: Yeah, the time is now. Yeah. Absolutely.
Thank you, Madam Vice President. Well, and now I want to turn to Vicky Garcia and — who helps the Latino Community Credit Union here in Raleigh.
And, Vicky, can you tell us what the community lenders and why they are important to Hispanics owning a small business?
MS. GARCIA: Buenas tardes. Thank you. First, I want to thank you, Madam President, for being here and putting a spotlight in community lenders. That’s the fancy name for credit unions or banks that care about the community.
Credit unions, in particular, and the Latino Credit Union was founded by Latinos for Latinos, and is actually administered by Latinos. So, it is an example on how the grassroots movements in North Carolina have created something that can put the economic opportunity there for Latinos in North Carolina.
I would like to tell the story how community organizations like ours can help Latinos with the story of one member. His name is Roberto. He came from Mexico. And one of the characteristics of Latinos in North Carolina — we are about 10 percent of the population here — we’re new to the state. This is a state that had received Latinos between the 1990s and the early 2000s. And we are starting to scratch the surface and get noticed, because we are creating these small businesses.
So, Roberto came to the credit union and asked to open an account. Why? Because he just got robbed down the street after cashing his check. So, the story starts not only with the idea of having a small business, but also protecting your assets and your family.
So, the credit union takes care of that member from the very beginning. So, opening an account, doing financial consulting, as you were saying, providing financial education, and also helping them move through the continuum of what is a financial history for an individual.
So, Roberto had his painting business. He had a van and five or six employees, and he was painting houses, you know, across the region. And he needed a loan for just working capital. He got granted a big contract, and he needed the money for that.
So, we focus on those micro-entrepreneurs that need help to get those small loans. And what’s the advantage of that is that we speak his language. We speak Spanish. We understand him. And we brought him and guide him through the continuum.
But the beautiful thing about that is that Latinos have come to North Carolina, and they want to buy houses as well. They want to contribute and be members of the community. So — (applause).
So, we created a mortgage product for all the Latinos that are wanting to buy a house and stay here and participate in the community in North Carolina. Forty percent of our mortgages are down to individuals who own their own business and have four or five employees working for them.
And the beauty of that is that they transmit that information to their four or five employees, and those are the ones that come after and apply of those mortgages.
So, we’re not only creating value through the initial loan, the small-business loan, but we are also helping them to stay, create roots, and participate and contribute to the community in general.
So, one of the things that we are very proud of is that we received through the ECIB program $99 million from the administration. (Applause.)
And for us, it’s the catapult to be able to provide loans for the members in the community. What that money is going to do: We’re going to be able to provide 1 million loans in the life of this loan that the administration has given us, and it’s going to provide $30 billion in loans that we can provide to the community. (Applause.)
So, I don’t want to be the best-kept secret. Please tell everyone that we can — you can go to the credit union, ask for a loan, get through the financial education program, and build your assets with us and in this beautiful country that I now call home. I am from Colombia originally, but I’m American and been here for 20 years. And I cannot see myself doing something better. This is the best road I have taken.
Thank you. (Applause.)
MR. BUZO: Excellent, Vicky. Wow.
I’m from Mexico. I became an American citizen two years ago. Yeah. (Applause.) It’s a good — it’s an honor to be part of this country.
Well, hearing from Ms. Garcia how important community banks and credit unions are, Madam Vice President, can you tell us the administration is doing for support of community banks and credit unions and for its small business?
THE VICE PRESIDENT: Well, Vicky just gave an example: almost $100 million. Because what — and this is just one of over 150 where we — community banks where we are dispersing these additional resources.
Because as you have so beautifully said with that story, it — the 1 million dol- — 1 million loans will have a profound, exponential impact on the economic health and wellbeing of the community.
And, you know, you said it so beautifully, Vicky. I think that when we think about what we support by supporting this kind of approach is community, on a number of levels — both in terms of the contribution and the feeling and the richness of the community and because of the wellbeing also of the community members. But also, let’s be clear, all of these small businesses are paying taxes, right? (Applause.) And so, it’s also about the tax base of the community, right?
In many places in our country, it is that tax base that’s going to have everything to do with the resources that go into things like public schools, that — (applause) — right? — great that go into other community improvements.
So, understand that when we’re talking about the benefit here, it is, yes, the owner; yes, their employees; yes, maybe their family members, who then learn that these mortgages are available. But it is that — but on the point also about homeownership, that’s about intergenerational wealth.
Intergenerational wealth. Because think about it. We all know this, right? You own a home. You build up capital so that when your daughter comes and says, “I want to go to such and such college,” you might say to her, “Sweetheart, don’t take out a student loan. I’ll take out some of the capital from the value of the house, and you don’t have to take out those loans.” Or your son comes and says, “I want to start a small business.” “Honey, you don’t need to — you know, you can come here.” And that’s intergenerational wealth.
And we know for communities of color in particular, but for all Americans, the greatest source of intergenerational wealth is homeownership.
So — and that’s another thing that when we think about the community banks, it’s a huge piece of it. We think of small businesses, but it includes — a big piece of business of community banks is helping with homeownership and mortgages.
So — but intergenerational: It’s about capacity. It’s about taxes. It’s about the tax base. And then, it’s about jobs. (Applause.)
Because again, this is about job creation. And for all of those reasons, I think this is critically important. And this is the work then that our administration is doing — in addition to the work we are doing around the federal contracts piece that we just mentioned, in addition to also understanding that our agenda here includes understanding the nuances.
So, I’ll go back, for example, to construction work and what we’re doing around building back up infrastructure. The difference between where we are now and where we could be with this approach — our collective approach — is helping that individual who is a — who is a construction worker go from being a subcontractor to a prime contractor. That’s a very big deal, in terms of what that means in terms of allowing that individual — that woman, that man, that person — to be able to grow their business and have, again, the residual impact for the community. So, those are some approaches.
And then, Administrator, you should speak — you’re the one who’s doing the hard work, through the SBA, of implementing a lot of this. How are you thinking about it?
ADMINISTRATOR GUZMAN: Yeah, well, it was a great honor to be able to join you here, because this is all I think about with your direction. I think that, you know, communicating how committed the Biden-Harris administration is to making sure that the economy works for everyone and using — (applause) — that’s right — and really using small business and entrepreneurship as that pathway to the American Dream is really critical.
I come from a small-business family, I’ve started my own small businesses, and I’ve realized opportunity through the American Dream.
And what Vice President Harris is so committed to is making sure that we can help businesses achieve success outcomes by leveraging federal programs. And the SBA is all about that American Dream and making businesses more successful by giving them the funding that they need to start their business or making sure that they have the networks and the advice and everything in their toolkit to be able to, day by day, grow their business and take advantage of the opportunities that the Biden-Harris administration is investing in on their behalf.
And then, of course, you know, making sure that we are on the ground. SBA, as you all know, is dispersed around the country with district offices and funding resource partners — many of them here today as well — that help businesses fill — fill that toolkit up with the tools to start a business by writing a business plan up — or maybe that’s finding out how to export their product abroad or get onto digital ecommerce and leverage these great opportunities.
And so, what we’re really committed to at the SBA is ensuring that the most critical success factor — being able to access capital to grow — is accessible to all. And that’s why I’m so glad that Vicky has joined us in the work that they’re doing in the community to make sure that all communities are financially ready and able to level up into entrepreneurship.
With the — with the SBA’s core resources, I want to spend a little bit time on capital because that’s the topic we’re really trying to lean into in the Biden-Harris administration.
And from day one — and even before that with Vice President’s leadership in the Senate — we have committed to making sure that we could ensure that the smallest of the small businesses could access capital.
SBA, of course, is — has been able to disperse relief during the pandemic to help save millions of small businesses. And in the President’s first year, $450 billion was dispersed around the country in relief, and we got it into the hands of those left out of previous rounds, into the hands of the smallest of the small businesses with success.
And that was through community, through organizations like many of you who are running those organizations today here in the room with us; in language, culturally competent organizations who could help us teach people how to access these incredible relief offerings.
And what we’re doing now to implement against this vision is making those changes across our core programs. Besides our COVID relief programs, SBA also disperses $40 to $50 billion a year into small businesses for working capital, lines of credit, asset purchases to buy your building or to buy equipment, all the tools and resources you need in the capital markets to grow your business.
And so, with the changes that we’re making to expand our footprint with more lenders, as well as simplifying our products so that it’s easier to meet you where you are and everywhere that you are and serve you with a product that is accessible to you — those changes are really critical to making sure that small businesses can get the startup capital or the growth capital that they need to be a part of those historic investments.
And right now, small businesses around the state are building bridges and helping us, you know, implement the Infrastructure Investment and Jobs Act and creating jobs in the process. And the SBA is here to help them do just that.
MR. BUZO: Wow. (Applause.) Thank you, Administrator Guzman. Well, it is very clear that they’re supporting the small business.
And, well, one final question, Madam Vice President. What resources can you share today for adults who wants to start a small business?
THE VICE PRESIDENT: There’s a lot. And I — I, actually, am going to turn it back to the Administrator, because one of the things I’ve been — I think that it’d be really helpful for us to share with the community and opinion leaders here as they use their bully pulpit is to help people understand, like, how do they access it. And so, let’s say I’ve got an idea.
And, by the way, when we talk about our small businesses, it — not only is it intergenerational but also, we’ve got entrepreneurs in their teens and 20s to families who have been doing this for generations and, you know, our seniors. And so, it’s really — that’s also what’s also exciting about our small businesses and who they are, because it spans the generations, in addition to being intergenerational.
But let’s talk about — so, I have an idea. Let’s say I’m, you know, however — whatever the age is, but I’ve got an idea. I’m youthful, whatever I am. (Laughter.) And I’ve got an idea, and I’m — I’m prepared to work hard. It’s the only way I know how to work. But I need access to capital. So, I know that there’s something out there about community bank, there’s something about — there about SBA.
But, as the individual, if we’re sitting down in my kitchen and you’re my neighbor telling me what to do, what would you tell me? What do I do?
ADMINISTRATOR GUZMAN: Well, I think that what we’ve invested so heavily in in the Biden-Harris administration, as you know, is leveling up our networks. You have to start with someone you trust, that local voice. And through the American Rescue Plan, the Biden-Harris administration has supported our community navigators around the country.
We now have 1,600 centers around the country and, here in North Carolina, every type of organization to help you get the skills you need, fill that toolkit with all the resources you need to run your business day to day.
So, we have SCORE chapters. Those are expert mentors who’ve done business themselves.
THE VICE PRESIDENT: How do I meet them?
ADMINISTRATOR GUZMAN: And you can go through SBA.gov and connect to local resources.
THE VICE PRESIDENT: (Laughs.)
SBA.gov/GetLocalAssistance [SBA.gov/Local-Assistance]. And I know we’re here today in force, my district team. But we — you know, you can connect to a SCORE mentor directly, as well as a Small Business Technology Development Center — you have several of them in this state — and Women’s Business Centers.
So, it’s basically about, you know, building a center that is welcoming to you. And we have funded community navigators here throughout this state to support small businesses. And so, you know, I think it’s — it’s so critical that you start and recognize that SBA can be a part of your team.
THE VICE PRESIDENT: So do I go on to — so if I go on to SBA.com?
ADMINISTRATOR GUZMAN: Dot-gov.
THE VICE PRESIDENT: Dot-gov.
ADMINISTRATOR GUZMAN: Yeah.
THE VICE PRESIDENT: Okay. And then where do I go? Like, do you — tell me where to go.
ADMINISTRATOR GUZMAN: Then there’s a — there’s a feed for “community navigators” as well as “get local assistance.” And that’s how you connect locally with our districts. It’s really important that you get a live voice —
THE VICE PRESIDENT: Yeah.
ADMINISTRATOR GUZMAN: — on the other end of that phone call.
THE VICE PRESIDENT: So I’ll actually talk to somebody?
ADMINISTRATOR GUZMAN: You’ll be able to talk to somebody.
THE VICE PRESIDENT: Oh, I like talking to people. (Laughter.)
MR. BUZO: I (inaudible).
MS. GARCIA: And let me ask one question. Is it in Spanish as well?
ADMINISTRATOR GUZMAN: We have advisors who can work with you in 27 different languages. (Applause.)
MR. BUZO: Oh, great! Great.
ADMINISTRATOR GUZMAN: And we’ve invested heavily in making sure that our resource partners, those Small Business Development Centers, the Women’s Business Centers, The Veterans Business Outreach Centers, the community navigators, and our districts have the cultural and language competency to be able to deliver.
And for the first time ever in the Biden-Harris administration, the SBA actually put one of its COVID relief resources in two languages — in Spanish and English. So, natively, you could go through the platform and not have to translate it alongside. And so that’s — we really are committed to making sure that we reach the smallest of the small with the best resources available in federal government.
MR. BUZO: Wow. Great. Thank you, Madam Vice President. (Applause.) Thank you, Administrator Guzman.
Same question for you, Vicky. And what resources can you share today for those who wants to start a small business?
MS. GARCIA: So, I would say go to a credit union, go to a Latino credit union — (laughter) — and open an account with us. Those deposits are the ones who get recycled in the system. Those are the funds that we can lend to those small businesses.
So the investment that the administration did to the credit union is $99 million. That amount of money could be multiplied by us being able to get $700 million in deposit. And that is all of you here, plus all the members of the credit union, and, more importantly, organizations that care about small business and the mission that we have as a community lender.
So those private funds — so, in big companies — health organizations can put their deposits with the credit union so we can lend them out to those who need the money the most.
So what we have available for you is the ability to open an account, get financial education, and get ready when you are. I know that it can be daunting when you go and “Oh, I have an idea, but I don’t know who to talk to.” And we — as a community lender, we are there for you. And we can — you — we understand the route that you have taken, and we understand that you need support from an organization that trusts that you can make it.
We have one of the best repayment numbers in the loans that we do; 99.3 percent of our members pay back the loans. (Applause.)
So, we’re not risky business. Actually, we’re a very good one.
THE VICE PRESIDENT: Yeah. Right.
MS. GARCIA: So just put your deposits where your heart is, and that will make you a best citizen. And you, indirectly, will be helping every small-business owner that could ask for a loan at the credit union.
THE VICE PRESIDENT: And if I can add to that. So, Jorge, you asked earlier, like, what have we been doing recently. We, last year, started what we’ve called the Economic Opportunity Coalition.
And so, I’ve been and we’ve been spending time with private-sector funders, and we now have some private equity investment going into the community banks. So, it’s not only the federal money — federal government money, but now we’ve got — I think it was B of A and Wells Fargo agreed to put $1 billion into what we’re doing around community banks.
We’ve got Google and all these others who we are now — who have agreed that it is a good bet. It’s — it is — it is very low risk, when even private investors are thinking about the return on their investment, to invest in community banks, which invest directly in the community.
I think part of it, if I can speak for them — I’ll just speak for myself as — to — as my observation — I think they also realize, one, that it is in the best interests of the economic strength and wellbeing of all of society to invest in these communities, but they also understand that the community banks just do it better in so many ways because they understand the community and everything that you have described happens there in a way that it may not happen with a big bank. Yeah.
MR. BUZO: Well, it has been an incredible conversation, and I learned a lot, and I hope you too.
And, well, I tried to open my own business — my small business, too. So, this is very — very useful, this information for me.
Thank you, Vicky — Mrs. Garcia. Thank you, Administrator Guzman.
Well, Madam Vice President, any closing comments?
THE VICE PRESIDENT: Well, I just want to thank everyone here. We’ve asked this group of leaders to come together this afternoon because you really are leaders on the ground. And it was very important for us to be here with you to thank you, because the work we do — generated out of Washington, D.C., and these places — will mean nothing if it doesn’t hit the streets as intended. And that’s where you all come into play.
There are a number of leaders at every level. I also want to mention we have Congresswoman Ross and Congressman Nickel. And I want to thank you all for the work that you have done.
There is, at every level, leadership that is important about this work, and we cannot do it without all of you here.
So, let’s keep it going. We have momentum, and the momentum is on our side. And so, let’s take advantage of this, knowing that time is a-wastin’, and — but there’s a lot of good to do, and we’re going to do it together.
So, thank you all. Thank you. (Applause.)
MR. BUZO: Thank you. The time is now. Thank you so much. Thank you, Mrs. Garcia. Thank you, Administrator Guzman. Thank you, Madam Vice President, for this great conversation. Thank you so much. (Applause.)
END 2:06 P.M. EST