Citizens Naturalized This Fourth Of July Could Become Fortune 500 CEOs

Immigration is a topic that has dominated national headlines and will undoubtedly continue to do so from now through the 2024 Presidential Election and beyond. One thing that cannot be denied about immigrants from all nations is that they are, by nature, risk takers. After all, it takes bravery and a sense of adventure – and sometimes desperation – to leave your native land and head to a country that you might not have ever seen before and where you may not speak the language well or even at all. What’s undeniable, especially as we approach the Fourth of July, a day when citizens will be naturalized all across the nation, that immigrants come here in hope of better opportunities for themselves and their families. They are ambitious and highly motivated because, in most cases, failure is not an option. They believe in the American Dream. Teaching Office Workers A multi-ethnic group of business people making [+] GETTY Immigrants have started more than half (55%) of America’s startup companies valued at $1 billion or more, and nearly two-thirds (64%) of U.S. privately held, billion-dollar companies (unicorns) were founded or cofounded by immigrants or the children of immigrants, according to the National Foundation for American Policy. Additionally, almost 80% of America’s unicorns have an immigrant in a key leadership role, such as founder, CEO, or vice president of engineering. U.S. Small Business Administration (SBA) research reports that immigrant owners comprise roughly 18% of business owners with employees and almost 23% of business owners without employees (solopreneurs). Immigrant-owned businesses are found in every sector of the U.S. economy. Accommodation and food services had the largest share of immigrant employer business owners at 36.8%, while transportation and warehousing had the largest share of immigrant non-employer company owners at 46%. According to the Kauffmann Foundation, which tracks immigrant entrepreneur trends, 28% of Main Street business owners are immigrants, even though immigrants comprise just 16% of the labor force and 18% of overall business ownership. Additionally, the Kaufman Foundation determined that 53% of grocery stores, 45% of nail salons, 43% of liquor stores, 38% of restaurants, and 32% of clothing and jewelry stores are immigrant owned. Indeed, 48% of overall growth of business ownership in the U.S. between 2000 and 2013 was attributed to immigrant business owners. Mexican chef working in an authentic Mexican restaurant A Mexican chef working in an authentic Mexican [+] GETTY Every large corporation at one point started as a small company. According to the Immigrant Learning Center, an astounding 43% of Fortune 500 companies were founded by first or second generation immigrants. These include corporate titans such as AT&T, Verizon, Pfizer, Google, Capital One, Nordstrom, Comcast, LinkedIn, eBay, PayPal, and Tesla. Immigrants come from many cultural backgrounds and bring different experiences and perspectives. This diversity can spark creativity and innovation, as well as different insights and approaches to problem-solving. Further, immigrant entrepreneurs often have the ability to tap into previously untapped markets back home and in immigrant communities. They can reach out to suppliers and customers that were previously unknown and can build extensive networks across the world to their homelands. This enables them to identify unmet needs and introduce new ideas and products into this country. Immigrant access to capital In part because they are new to this country, immigrants often utilize their own savings and tap into the resources of family and friends in their ethnic communities to fund their ventures. These businesses tend to have lower failure rates because their founders are driven not to let their families, friends, and other investors down. Asian male florist, owner of small business flower shop, using digital tablet while working on laptop against flowers and plants. Checking stocks, taking customer orders, selling products online. Daily routine of running a small business with technology Asian florist, owner of small business flower [+] GETTY If more capital is required to launch a business than an aspiring entrepreneur can put together from personal savings and family and friends, they may look to various forms of debt financing. Undoubtedly, bank loans are harder for new immigrants to obtain because banks tend to look at personal credit history. Immigrants may have bad credit or no credit history at all, which hurts their chances of obtaining small business loans from traditional sources (banks). Immigrants who are lawful permanent residents of the U.S. are eligible for SBA loans. People who have just recently arrived in the country and who are awaiting their green card can apply. SBA loans are available for firms that are at least 51% owned and operated by non-U.S. citizens. It is important to note that the application process can be quite extensive, and there are several eligibility requirements for immigrant business owners must meet before applying. However, in the current atmosphere where banks are rejecting more than eight-in-ten term loan applications, SBA loans have become a lifeline for small business owners. Approval also will depend heavily on the applicant’s business history and credit score. But if you are willing to deal with all the red tape that goes with applying for an SBA loan, the upside is markedly lower financing rates and generous lengths of time to repay the loan than is the case with other loan options the immigrant business owner might be exploring. Borrowers who don’t qualify for traditional bank loans or SBA loans can look to alternative sources of funding, such as a merchant cash advance. These non-bank lenders grant the borrowers access to cash, and the business owner is then required to pay an agreed upon portion of sales made via credit and debit cards and other business receipts, until the entire payback amount has been repaid with interest. While a merchant cash advance company does not require collateral or even a minimum credit score, they charge a premium interest rate for assuming the risk of lending to someone with bad credit or no credit history at all. Thus, immigrant business owners can pay a higher cost of capital than other borrowers who qualify for bank loans. Immigrants are willing to take risks because they bring unique business propositions and often launch companies that successfully cater to specific ethnic or cultural communities. Often, they provide goods and services that underserved markets need. In fact, this niche focus often is a competitive advantage for immigrant entrepreneurs, who understand their clients in the community. This is how my company, Biz2Credit, began more than 15 years ago. For more information, visit us at https://www.beverlyhillsimmigrationlaw.com/.