The Statewide Hispanic Chamber of Commerce of New Jersey, or SHCCNJ, serves 120,000 Hispanic-owned businesses that contribute an estimated $20 billion annually to the state economy, according to the organization’s CEO and president, Carlos Medina.
NJTV News Chief Political Correspondent Michael Aron spoke with Medina and SHCCNJ Chair Luis De La Hoz, who said access to capital is the biggest problem Latino-owned small businesses face when starting or growing.
“That’s related to two major credit issues. One is the lack of personal credit history and the lack of collateral,” said De La Hoz. “Unfortunately, many financial institutions rely on credit reports to consider minority-owned businesses or require one-to-one collateral when we are trying to access capital.”
While a typical interest rate on a loan from a big bank is 9%, some members of the SHCCNJ can end up paying as much as 300% on loans from alternative business lenders. On the issue of predatory lenders, Medina says that there is legislation in Trenton that aims to correct such practices.
Additionally, the SHCCNJ has created a fund in partnership with World Business Lenders in Jersey City that provides small business loans at 9% APR. So far, the partnership has handed out out eight loans.
“We’re very happy about its success,” said Medina. “We need more banks to come and help us get capital because what we pay for capital is relative to what we’re able to lend out.”