Small Business: Driving the Miami Economy Forward
A conversation with our Miami leaders.
South Florida is a bellwether region for minority-owned small businesses. Miami has the 2nd largest Hispanic-owned small business community in America, according to the U.S. Census.
Think tanks have estimated that if Latino-owned businesses reach their full growth potential, our economy will benefit from a $1.4 trillion boost. That’s an economic impact equal to the Gross Domestic Product (GDP) of Mexico. Yet, there are barriers to overcome, including the need for mentorship, technical assistance and access to capital.
Chase for Business serves more than 4 million small businesses across the United States. Beyond supporting their growth with transaction accounts, payment processing, lending, and resources, the firm is contributing $75 million through its Small Business Forward philanthropic program to help expand access to capital and accelerate growth, especially among minority-owned businesses.
“It makes smart economic sense to invest in small businesses and it’s the right thing to do to support job creation, stronger neighborhoods and paths out of poverty for more people,” said Mel Martinez, chairman for JPMorgan Chase in the Southeast.
Martinez joins Peter Salas, who leads specialty finance for Chase in the region and is a long-time Accion board member, and Carlos Alzate, who heads the Chase for Business team in Miami-Dade County, to discuss the firm’s efforts to boost entrepreneurship in Miami:
Martinez: JPMorgan Chase released a report earlier this year which found that small businesses In Miami have about 25 days of cash available to them if they don't get any money in. It is very important to address this, because capital goes hand in hand with credit health and the ability to grow, expand, and add jobs, increase production, and all the things that lead to long term success.
Salas: That's one of the main things in South Florida, and Miami, historically for small business owners: access to capital. We have seen an increased need for more pathways, so businesses can get what they need to grow. That’s why we work with the Small Business Administration and with organizations like Accion to make sure more options are available.
Alzate: When Latino entrepreneurship started to accelerate after the economic downturn, we saw a big boost in the number of new businesses being created—in fact, Hispanic business owners outpaced peers in creating new businesses. But what is most important is to sustain those businesses, make them stronger, make sure they can withstand the test of time, of economic cycles to come. We do that by helping them build a strong foundation and guiding them along the way. Miami, and our country, need them to succeed.
Salas: Miami has been, in large part, built by entrepreneurs. Hispanics have a very high propensity for starting businesses—my father was a small business owner, and so were many of the people that I grew up in the city. Research has shown that minority-owned businesses often rely on family for money, but we want to help these economic drivers access other capital streams.
Alzate: Think of Miami-founded Panther Coffee. Founders Joel and Leticia Pollock came to Miami in 2010 with the goal of launching a coffee business, and they borrowed money from their parents and from a non-traditional lender. A few years later, when the Pollocks were ready to expand, Chase was able to loan them needed capital. Panther quickly took off and has grown from its original Wynwood location to three locations across Miami, with more planned. They expect to create another 50 to 60 jobs in Miami.
Salas: We see many stories like theirs, and others like La Licuadora in Downtown Miami and Kalos Music in Aventura. There are many businesses that can trace their success back to a loan from Accion, one of the community development financial institutions we work with every day. Accion bridges the gap for businesses that might not be ready for a relationship with a large financial institution.
Martinez: We know CDFIs work and we thank you, Peter, for representing Chase on Accion’s board. Their model broadens opportunities for businesses and our communities. They go deep in neighborhoods and provide critical support. Their expertise, ability to provide technical assistance, and invaluable mentorship helps businesses strategically plan and create a solid credit history. The value of this work has led JPMorgan Chase to more than double the size of our global Small Business Forward program. In October we committed $75 million over the next three years to support women-, minority- and veteran-owned small businesses. We believe in these programs as a way to increase access to capital for small businesses.
Salas: Typically, an entrepreneur will go into a bank branch and outline where they are in starting a business. If they're not quite ready for a traditional loan, that's where an alternative organization comes in, where commercial interests combine with philanthropic to work together as a catalyst.
Alzate: Sometimes a business might come to us and through our due diligence we determine that Accion would be a better fit to serve their needs. We may also refer them to microlender Grameen. The JPMorgan Chase Foundation provided a grant to Grameen to support its expansion in South Florida. The model has proven very successful in Florida and we will take lessons we learn from here to other communities around the country.
Martinez: It is very gratifying to watch great small businesses grow and expand their economic impact as employers and contributors to our communities. All businesses begin as small businesses. Even our global firm was once a small enterprise.
Alzate: We work every day helping small business owners in Miami and it’s great to see them at the stage of outgrowing their physical space, needing to buy a new warehouse, and increasing inventory. It’s rewarding to watch them become large commercial enterprises, and to support them in that journey.
Martinez: That’s the story for some of Miami’s best known success stories. When we look at those businesses started by minorities, Miami’s experience in managing growth, providing the right framework for success, and serving owners through relationships are all strong areas of expertise. And, that expertise and experience can help other emerging, diverse small business communities across the country succeed.
Alzate: Miami is one of the most mature Latino small businesses markets in the country, and one of the strengths of the JPMorgan Chase team here is that we are part of the community we serve and our commitment to helping more businesses succeed runs deep. I have one of the best jobs at Chase.
Learn more about how JPMorgan Chase supports the success of underserved small businesses.