EconSouth (First quarter 2005)
Q & A
An interview with Nuby J. Fowler of the Small Business Administration
The term “Southern accent” might be taking on a slightly different meaning as the South becomes increasingly Hispanic.
Consider that from 1990 to 2000, the Hispanic population of every Southeastern state except Louisiana more than doubled. These new arrivals are an economic force. The buying power of Hispanics nationally and in the Southeast is soaring because of the sheer number of immigrants.
At the same time, growing numbers of Hispanic entrepreneurs are launching companies. The number of U.S. Small Business Administration (SBA) loans to Hispanic Americans has risen sharply, to 6,112 in 2003 from 3,500 in 2000, according to the U.S. Census Bureau. Few have observed this trend more closely than Nuby J. Fowler, regional administrator of Region IV (the Southeast) for the SBA. Fowler, a native of Colombia, has helped immigrant entrepreneurs secure capital for years. EconSouth talked with Fowler about the economic implications of the South’s influx of Hispanics.
EconSouth: Is the current wave of Hispanics immigrating to the United States driven mainly by economics?
Nuby J. Fowler: You have to realize first that Hispanics are not a monolithic group. You will have those who come here thinking, “I want to go and have a good job to send money home for my family that is left behind.” Then there’s a group that we never pay attention to, the ones that get transferred from the big companies in Latin America and Spain to the United States, and they also bring in their own culture. But they’re not as visible as those who are working in construction and landscaping, etc. And the third group—I would put myself in that group—are the ones who many, many years ago, because of economic reasons in their own countries, decided to seek a better life in the United States.
ES: Can you talk about the nature of businesses that you see Hispanics starting? And what sorts of issues arise in obtaining credit?
Fowler: Let me address the first question. First of all, Hispanics try to serve each other, so they have a big service community because of the language capability. Many of them cannot speak English. But even those who speak English somewhat still prefer to speak in their own language. However, because of that language barrier, many choose a business in the Hispanic community. You have attorneys and realtors and insurance agents, CPAs.
Then you have the retail stores, restaurants, dress shops, bridal shops, and small supermarkets. There are quite a few immigrants who have more business experience. Sometimes we have people who finish an M.B.A. in the United States and remain here. And then they have a big business because they have the wherewithal and the education and the drive to do those things. And they are comfortable with the system because you have to really understand the system. .
ES: Speaking of the system, what are the most difficult parts to understand for immigrants, especially in securing credit?
Fowler: Those who have mainstreamed have no problem doing business with financial institutions. For others who are the most recent arrivals, their issue is, number one, they don’t trust their government in their [home] countries, and they don’t trust the banking system. So they bring that mindset to the United States. And they are intimidated by big institutions where there is the language barrier. Witness the fact we have quite a few banks that have tried to market to them, and they are making inroads.
For the “mainstreams,” securing credit may be an issue if they don’t have a credit history. But I don’t see that as a big issue. For the others, because they don’t have a credit history here, they may be denied credit. Also, many do not understand a contract and what is entailed if they break that contract. And they don’t understand that if they don’t make the payments, it will be reflected in their credit report.
ES: If you sit down with a fledgling entrepreneur who has come to this region from Mexico, Central America, or another state, would the basics you’d lay out for them be any different from what you would tell anyone else?
Fowler: Because many times they don’t know how to manage the system, I would definitely recommend that they seek an accountant for tax issues. Seek expertise that can help you at least start your business on the right foot.
ES: Are there cultural traits among Hispanics that tend to be conducive to starting businesses or that lead people into certain types of businesses?
Fowler: You have to realize that those who immigrate are really gutsy people. They face so many risks. And anybody who is that determined, I think, has what it takes to be a good entrepreneur. However, you also have to have knowledge, some type of technical expertise.