Immigration has been at the forefront of conversation these days. What is often lost in this discussion is how immigrant-owned businesses benefit the U.S. economy. In fact, immigrant-owned businesses employ 8 million workers and generate over a trillion dollars in sales.
Their success can be seen in both Fortune 500 companies and in small businesses. Unfortunately, immigrant small business owners have been hit hard by the Covid-19 pandemic, as a study by the National Bureau of Economic Research found that a third had reported significant losses. This is compounded by the fact that many owners are uncertain about their eligibility for government assistance programs.
As President and CEO of the National Immigration Forum, Ali Noorani leads an advocacy organization that works with faith, law enforcement, and business leaders in promoting the value of immigrants and immigration to the U.S. A second-generation American, Ali grew up in California as the son of parents born in Pakistan and is the author of “There Goes the Neighborhood: How Communities Overcome Prejudice and Meet the Challenge of American Immigration,” and host of the “Only in America” podcast.
I recently connected with Ali to discuss the impact of Covid-19 on immigrant business owners, ways lawmakers can support them, and the steps they can take to keep their businesses viable during this time. I am grateful to Ali for taking the time to speak with me; below is a summary of our conversation.
Rhett Buttle: Can you describe the impact of immigrant-owned businesses in creating jobs in the U.S.?
Ali Noorani: The impact is, in a word, tremendous. In 2017, more than 3.2 million immigrants ran their own businesses and employed almost 8 million American workers, generating $ 1.3 trillion in total sales. By this measure alone, it is abundantly clear that immigrants and immigration are of great benefit to the nation.
As a percentage, immigrants are more likely to start businesses than U.S. citizens are. Yes, immigrants represent more than 40% of the founders of Fortune 500 businesses, but they also are heavily represented in Main Street businesses. I think most of us have firsthand experience with that — these are businesses such as restaurants, grocery stores, gas stations, and dry cleaners. Immigrant-owned businesses are fuel for the U.S. economy.
Buttle: How are immigrant-owned businesses being impacted by the Covid-19 pandemic?
Noorani: Covid-19’s impacts have been significant. More than a third of immigrant business owners have reported “substantial losses in business activity,” according to a study by the National Bureau of Economic Research. Only African American business owners reported such losses at a higher rate (41%).
Immigrant-owned businesses are heavily represented in some of the sectors Covid-19 has impacted most, such as transportation, restaurants, and hospitality. Since many businesses are located in communities disproportionately impacted by Covid-19, those that have been able to remain open may have seen a drastic decline in demand for their services or products.
Buttle: What effective support of immigrant-owned businesses has there been from policymakers and other leaders (e.g., corporations, philanthropy)? What else should they be doing to help?
Noorani: There is no federal program created in response to Covid-19 that is just for immigrant-owned businesses. Many immigrant-owned businesses may be eligible for general Covid-19 economic relief programs for businesses, such as the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL). However, eligibility does not ensure equal access or guarantee that funding will be made available through these federal programs.
Unfortunately, there is significant ambiguity about immigrant businesses eligibility’ and how the government weights eligibility, both of which have limited the number of immigrant businesses getting assistance. Furthermore, in the first wave of PPP loans, immigrant businesses that bank with smaller community banks were at a disadvantage in being able obtain PPP loans, compared with larger businesses.
A survey of Latino small business owners (both immigrant and nonimmigrant) taken in June found that 71% of respondents did not apply for government assistance. Of those respondents, nearly 20% believed they might qualify but needed assistance with the forms. Language barriers and technological illiteracy are among the factors that might make the online applications for PPP and other business loans or grants difficult for many immigrant-owned businesses to access.
One barrier unique to immigrants is that they may be reluctant to access available resources out of fear that doing so may affect their long-term immigration and naturalization prospects. The litany of changes in immigration policy by the Trump administration have made a system that many feel is more complicated than our tax code, even more convoluted.
Government officials should clearly articulate whether and in what circumstances immigrant businesses are eligible for relief programs — federal, state, or local. Addressing language and digital barriers would be helpful as well. More concretely, simplifying the PPP forgiveness process and making forgiveness automatic for loans up to a certain amount also would be highly beneficial.
Private companies, foundations, and other philanthropic organizations are also starting to assist in Covid-19 relief to businesses. However, their contributions are difficult to fully capture as they represent such a diverse sector of support and often target specific geographic locations. Given the overall estimated reduction in the number of business owners by some 3.3 million, the impact of such assistance most likely will be limited to businesses, including immigrant businesses, that have the contacts or ability to know what assistance is available.
But there are some possibilities. The Boston Foundation has made nearly $ 1 million available to greater Boston nonprofits that provide critical support to communities, including nonprofits that work with immigrants. Google has committed $ 175 million to Black-owned businesses. Magic Johnson Enterprises is aiming at minority- and female-owned businesses with a $ 100 million commitment. PayPal and the Association for Enterprise Opportunity are targeting Black-owned businesses with a $ 10 million fund.
Buttle: What are the top things immigrant small business owners need to think about and do to keep their companies viable in these uncertain times?
Noorani: For starters, small business owners need to know what federal, state, and local public and private resources are available to assist them in these unprecedented times. They need to better understand not only what resources are available, but also which ones are not applicable, and how to secure the available resources to maintain their businesses.
Immigrant business owners need to stay up-to-date on the latest health precautions they need to take for their workers and customers and make sure their employees have the necessary personal protective equipment and have a safe environment in which to work. These precautions can help protect the health of their workers and customers and protect against legal liabilities.
But the response and recovery to Covid-19 is not on the immigrant business owner alone. Local Chambers of Commerce, Rotary Clubs, banks, and other civic institutions should redouble their own efforts to engage immigrant business owners. We all have stories of business districts revitalized by immigrant entrepreneurs. Therefore, it is going to take all of us to support these business owners and ensure Main Streets across America continue to thrive.
Buttle: What resources can help business owners during this time?
Noorani: In terms of existing resources, public resources are available at the federal, state, and local levels, and some private resources are available as well. Immigrant business owners should look for information from organizations and agencies focused on issues relevant to small businesses. For example, the Small Business Administration and other business associations have helpful information on their websites about resources available to aid with economic recovery from Covid-19.
In light of the ongoing nature of the pandemic, immigrant business owners would also do well to consider which components of their business model can be conducted virtually and invest in the technology to make that possible.
Additional resources that would benefit immigrant business owners include help desks with native-language speakers available, and technical assistance to complete the paperwork necessary to secure funding opportunities.
Don’t miss my earlier conversations with Ron Busby, CEO of the U.S. Black Chambers, Inc., Ramiro Cavazos, President and CEO of the U.S. Hispanic Chamber of Commerce, Chiling Tong, President and CEO of the Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship, Jen Earle, National CEO of the National Association of Women Business Owners, and Jill Houghton, President and CEO of Disability:IN.