The Reagan administration's new multibillion-dollar program aimed at helping minority-owned businesses could not have come at a more propitious time.
While smaller firms in general have been hit hard by the current recession, black-owned companies have been especially pummeled. Caught between sagging demand and high debt ratios, many black firms have been forced to shut their doors during the past year or so.
In money terms, the administration initiative represents a major increase over prior federal programs. The government will spend up to $15 billion to purchase goods and services from minority-owned firms in the next three years. That is a 36 percent increase over the past three years. The government will also extend $1.5 billion in credit to minority firms and another $300 million in management assistance during that period. That represents an increase in credit assistance of about $200 million.
Such assistance need hardly be looked upon as a form of favoritism not granted to the overall business community. The point is that minority firms tend to have challenges that go beyond business problems in general - such as difficulty in obtaining bank financing, lack of management expertise, and a more limited potential sales market. It is essential to society at large that such firms be given all possible support. Not to do so, and see more and more minority firms go under in this adverse economic period, would mean added long-range welfare and public assistance outlays.
The task for Congress and the administration - not to mention the black community - will be to ensure that the plan is put into effect as expeditiously as possible.
The administration's avowed aim of creating 60,000 new minority-owned businesses (and encouraging formation of another 60,000 firms) during the next decade is a goal that can and should be met. Every reasonable effort must be made to fulfill such a worthy objective.