Sixteen Percent Of High-Impact, High-Tech Firms Founded By Immigrant Entrepreneurs

Sixteen percent of high-impact, high-tech firms have at least one immigrant founder, according to a study released today by the Office of Advocacy of the U.S. Small Business Administration.  Although these firms are concentrated in states with large immigrant populations, in most other respects they resemble high-impact, high-tech firms founded by native-born entrepreneurs.

Moreover, these immigrant entrepreneurs are highly educated and appear to be strongly rooted in the United States.  Roughly 55 percent of the foreign- born founders hold a masters degree or a doctorate.  In addition, they are more than twice as likely as native-born founders to hold a doctorate.  Furthermore, 77 percent of the foreign-born high-tech entrepreneurs are American citizens and, on average, they have lived over 25 years in the United States.  Two-thirds of them received their college degrees here, as well.

“Immigrant entrepreneurs clearly contribute a significant amount to our country’s cutting edge high-tech firms,” said Shawne McGibbon, acting Chief Counsel for Advocacy.  “This report outlines these contributions and delivers important new data about immigrant entrepreneurs.”

High-tech Immigrant Entrepreneurship in the United States, written by David Hart, Zoltan Acs, and Spencer Tracy, Jr. with funding from Advocacy, defines high- impact firms as those with sales that have at least doubled over the 2002-2006 period and which have significant employment growth during that time. The authors defined high-tech industries using research and development employment as a share of total employment as the key criterion.

For a complete copy of the report, visit


SBAM leader David Rhoa of Lake Michigan Mailers quoted in The Washington Times article on proposed health insurance surcharge

Excerpt from today's (7/16/09) article in The Washington Times "Health care bill would deliver pre-Reagan tax rates -- small-business owners warn of impact"

"That tax is going to be paid for by something, that's going to go right to jobs. That money has to be taken from the employer and given to the government," said David Rhoa, whose Indiana [and Michigan] company, Lake Michigan Mailers, is in the direct-mail business. "While I can't speak for every employer, I can say that many of them are going to take that right from their payroll."

Read more by clicking here.

Small Business Champion Podcast: What the Michigan Legislature Will be Up to This Summer (29:13)

Our show this week is a rebroadcast of a live program we did July 9 on BlogTalkRadio with Dave Palsrok, vice president government relations, and Mike Batterbee, director of government relations, where we talked about what the Michigan legislature will be up to this summer and the impact on small business owners. It’s longer than our usual show, running about 30 minutes, and the audio quality is not up to our usual standards because we had to record it over a phone line. But, it’s full of great information and we hope you enjoy it.

Listen to the podcast by clicking here.


SBAM Tells State Senate to Oppose Job-Killing Unemployment Insurance Expansion

Standing united in opposition to a proposed expansion of Michigan's 100 percent employer-financed unemployment insurance system (HBs 4785-86), SBAM and over 1,000 Michigan job providers, employing hundreds of thousands of workers, recently signed a letter to the State Senate urging defeat of this harmful legislative package.

"This letter sends a clear message to legislators that the proposed unemployment insurance expansion is a real threat to Main Street," said Wendy Block, Director of Health Policy and Human Resources for the Michigan Chamber of Commerce. "This proposal would increase unemployment insurance taxes on Michigan employers at a time when they can least afford it, which could lead to further layoffs and other reductions in business operations."

Listen to SBAM's Small Business Champion podcast interview on this topic with Director of Government Relations Mike Batterbee.


Wide-ranging Review of Small Firm Financial Markets Features Data from Survey of Small Business Finances

Access to credit, a top issue for small businesses in the current climate, is the focus of a new compendium of studies sponsored by the Office of Advocacy. The structure of small business financial markets has been changing dramatically over recent decades, as large financial institutions have increased in importance. Small Business in Focus: Finance was released today at an Advocacy symposium.

“In this time of financial challenges, it is particularly important to understand small business borrowers and the markets that serve them,” said Advocacy Senior Economist Charles Ou. “We hope that this compendium and today’s symposium will be a starting place for ongoing discussions of the small firm financial markets, as well as the datasets available to understand them.” Dr. Ou will retire in July after 32 years of service.

The studies featured in the compendium are based primarily on the 2003 Survey of Small Business Finances (SSBF). The SSBF has been one of the highest quality data sets for analyzing the credit issues faced by small firms. The Federal Reserve Board conducted the SSBF in 1987, 1993, 1997, and 2003 and will rely on the 2010 Survey of Consumer Finances for future data on business-owning households. Four studies are featured:

A report by Advocacy economists Charles Ou and Victoria Williams provides an overview of small business borrowers, the credit and capital markets that serve them, and small business borrowing patterns.

A paper by George Haynes and James Brown explores in detail small business financing patterns, including the relative importance of banks, thrifts, and finance companies in these markets. The share of small firms using any credit increased from almost 80 percent in 1993 to almost 90 percent in 2003.

A second paper by the same authors looks at the critical importance of internal funding for small business growth and finds that the relationship between internal funds and employment growth is especially important for very small and women-owned firms.

A study by Rebel Cole looks at the credit markets and identifies four kinds of small businesses: nonborrowers, approved borrowers, discouraged borrowers, and denied borrowers. In each of the three SSBFs, Cole finds that firms owned by African Americans are 10 to 18 percent more likely to be rejected than other firms, even after incorporating an extensive set of control variables available from the SSBFs.

The full studies are available online at

SBAM Praises Senate Cuts in State Budget

SBAM supports Senate action that cuts $1.2 billion from Michigan’s proposed 2009-2010 state government budget. “Small business owners across this state have been forced to make difficult cuts within their business operations and it is about time that our state government does the same,” says Rob Fowler, president and CEO of SBAM.

Michigan faces a $1.7 billion budget deficit for the 2009-2010 fiscal year. Compared to the Senate’s $1.2 billion in cuts, Democrats in the state House have proposed $525 million in cuts with more of the budget deficit to be made up with federal stimulus money.

Fowler praised Senate Majority Leader Mike Bishop (R-Rochester) and his Republican caucus for the difficult budget decisions they made this past week. “These are not easy decisions, but the reality of our current economic position demands that our leaders come up with budgets that are reflective of the actual revenues that are currently available,” says Fowler. “It is going to take bold leadership if we are going to find success in our economic recovery, and this week that leadership was demonstrated in the state Senate. We encourage all of our lawmakers to follow their lead all the way through the target setting and final budgetary process.”

Small Business Champion Podcast: Action Center of New SBAM Web Site Makes it Easy to Get Involved with Legislative Issues (6:19)

This week, SBAM's Vice President Communications Michael Rogers talks with SBAM’s Vice President Government Relations Dave Palsrok about the exciting new tools in SBAM's redesigned Action Center at The weekly Small Business Champion podcast is the place where you can get the scoop on what’s really happening in Lansing and what it means to your bottom line.

Listen to the podcast by clicking here.


New, Redesigned SBAM Web Site Launched at

“We are planning to use the power of this new Web site to dramatically grow our membership and our legislative clout, and provide new tools that SBAM members can use to influence the legislative process,” says SBAM President and CEO Rob Fowler. “Through the power of social networking and online collaboration, we’re going to allow small business owners to come together in a genuine, useful and valuable online community.”

Highlights of the new Web site include:

  • A reorganized Resources section to help members take better advantage of SBAM’s many money-and-time-saving products and services.
  • Comments. Every SBAM member can post comments on all Web site articles.
  • Forums that provide discussion threads on all kinds of subjects important to the success of small business.
  • The SBAM Power Boost Blog, updated daily by SBAM staff and leaders, that provides specific, real world suggestions on how to better run your small business operation.
  • Rich audio-visual content, like the weekly Champion podcast, that leverages the expertise of SBAM staff and members.
  • An interactive membership directory that lets small business owners connect to their fellow SBAM members and find business locations on a Google map.
  • A new Action section that helps members get personally involved to make a difference in the legislative battles SBAM is fighting on their behalf in Lansing and Washington, D.C.
  • Built-in social networking links that allow members to post Web site content to Facebook, LinkedIn, Twitter and dozens of other choices.
  • Hot Topics that tell members what other visitors to the SBAM Web are viewing and reading.
  • A My Profile section that allows members to conveniently update their online profile.

The new, redesigned SBAM Web site can be found at


U.S. Small Business Administration (SBA) Launches New 100-Percent Guarantee ARC Loan Program to Help Struggling Businesses

Small businesses suffering financial hardship as a result of the slow economy may be eligible to receive temporary relief to keep their doors open and get their cash flow back on track through to a new loan program announced by SBA Administrator Karen G. Mills.

SBA will guarantee America’s Recovery Capital (ARC) loans. ARC loans are deferred-payment loans of up to $35,000 available to established, viable, for-profit small businesses that need short-term help to make their principal and interest payments on existing qualifying debt. ARC loans are interest-free to the borrower, 100 percent guaranteed by the SBA, and have no SBA fees associated with them.

“These ARC loans can provide the critical capital and support many small businesses need to make it through these tough economic times,” said Administrator Mills. “Together with other provisions of the Recovery Act, ARC loans will free up capital and put more money in the hands of small business owners when they need it the most. This will help viable small businesses continue to grow and thrive and create new jobs in communities across the country.”

As part of the Recovery Act, the ARC program was created as a no-interest, deferred payment loan to help small businesses that have a history of good performance, but as a result of the tough economy, are struggling to make debt payments.

ARC loans will be disbursed within a period of up to six months and will provide funds to be used for payments of principal and interest for existing, qualifying small business debt including mortgages, term and revolving lines of credit, capital leases, credit card obligations and notes payable to vendors, suppliers and utilities. Repayment will not begin until 12 months after the final disbursement. Borrowers don’t have to pay interest on ARC loans. After the 12-month deferral period, borrowers will pay back the loan principal over a period of five years.

ARC loans will be made by commercial lenders, not SBA directly. For more information on ARC loans, visit


Strong dollar has little effect on small retailers, larger effect on wholesalers

A strong dollar (making imports cheaper and exporting more difficult) appears to have little effect on the survival rate of small retailers, according to a study released by the Office of Advocacy of the U.S. Small Business Administration. The study covers 15 years of data, from 1990 through 2005, from the U.S. Census Bureau’s Statistics of U.S. Businesses and other sources.

On the other hand, the study’s authors found that real exchange rate appreciation lead to increased rates of small firm exit in the wholesale sector. In wholesale firms with more than 10 employees, a 10 percent real dollar appreciation leads to a roughly 20 percent increase in firm closures. This finding suggests that wholesalers are closely tied to domestic manufacturers, and find it hard to switch suppliers to take advantage of falling import prices.

“For many people, the idea of currency exchange rates has no relevance other than how far their dollars will go while on vacation,” said Shawne McGibbon, Acting Chief Counsel for Advocacy. “But it is of vital importance to the owners and employees of small wholesalers. Policy makers should take these concerns into account when making decisions affecting the relative strength and weakness of the dollar,” she added.

Robert M. Feinberg wrote Effects of International Competition on Small Wholesale and Retail Trade Firms with funding from the Office of Advocacy.

For more information and a complete copy of the report, visit the Office of Advocacy web site at