Small Businesses Have a Stake in Trans-Pacific Free Trade Debate

Headlines in the debate over the proposed Trans-Pacific Partnership free trade deal have focused on its potential effects on overall U.S. jobs and economic growth. But small businesses should be paying attention, too, academic experts tell NerdWallet.

That’s because the accord among the United States and 11 other countries on the Pacific Rim would create new opportunities for some firms while forcing others to face stiffer competition.

“Every change in trade policy creates winners and losers,” says Debra Glassman, a senior lecturer at the University of Washington’s Foster School of Business who specializes in international trade. “There’s no way to craft a treaty or legislation that benefits everybody.”

Debra Glassman of the University of Washington says there’s simply no way to make a trade treaty that benefits all parties. 

Critics, led by Sens. Elizabeth Warren and Bernie Sanders, warn that the Trans-Pacific Partnership would benefit mainly big U.S. corporations while causing a decline in U.S. wages and the loss of American jobs. They also say the deal would weaken environmental regulations and laws related to food safety, and they lambaste the Obama administration for not disclosing details of the proposed accord.

President Barack Obama, who’s asking Congress to approve the deal, rejects such arguments, saying in his April 25 weekly radio address that the pact features “strong provisions for workers and the environment — provisions that, unlike in past agreements, are actually enforceable.”

He also affirmed a key aim of the pact, which does not include China: to strengthen the United States’ political and economic position in the Asia-Pacific region.

“If America doesn’t shape the rules of the global economy today, to benefit our workers, while our economy is in a position of new global strength, then China will write those rules,” he said. ”I’ve seen towns where manufacturing collapsed, plants closed down, and jobs dried up. And I refuse to accept that for our workers. Because I know when the playing field is level, nobody can beat us.”

But for small businesses, that depends on the field they’re playing on and their ability to adapt to the market changes the Pacific free trade pact would bring.

Competitiveness counts

Brent Haddad

“Making it easier to import and export will help small businesses that can compete in the other markets,” says Brent Haddad, director of the Center for Entrepreneurship at the University of California, Santa Cruz.  “Less competitive businesses will have to adapt.”

Glassman cites the example of small businesses that use dairy products in their offerings, such as sandwich shops and delicatessens. Cheaper dairy products from, say, New Zealand, as a result of the trade pact could be good news for these shops, she says.

“If you reduce barriers, any business that uses dairy products as an input may offer cheaper products to customers,” she says.

But there’s a flip side. “Let me turn the dairy argument around,” Glassman says. “If you are a small producer of cheese or a distributor who represents dairy producers in the region, and all of sudden new competitors come in from overseas, you may suddenly find your market not so secure.

“You have to either make some changes or you’re in trouble,” she adds. “The effect on you and your market could be big. It could be life or death for your business.”

Christopher Tang

But such challenges could also force small businesses to be more nimble and creative.

Christopher Tang, a business professor at the Anderson School of Management at UCLA, cites the example of small coffee shops in the U.S., many of which have long been pressured by the big chains, led by Starbucks.

Pacific free trade would give these companies access to cheap coffee beans from countries like Peru and Vietnam, he adds. But small coffee shops could also explore other strategies to meet that challenge, such as forming consortiums to buy coffee beans in bulk, he adds. “Otherwise, they cannot compete,” he says.

Leaning on quality

Adina Ardelean, a lecturer who teaches international economics at the Leavey School of Business at Santa Clara University in California, also paints double-edged-sword scenarios. “Any kind of trade would harm some sectors but would also benefit others,” she says.

Adina Ardelan

For example, she says, small businesses that make clothes, shoes and other footwear will likely face more competition from such countries as Vietnam and Malaysia. But the Pacific free trade accord could also open up new opportunities for some of these firms, particularly those selling higher-quality items made in the United States. In fact, they could leverage that fact and charge “a price premium” for apparel and footwear because they’re “Made in the U.S.A.,” she says.

Haddad, of UC Santa Cruz, also argues that “although we associate weaker competitive businesses with the ‘old economy,’ we can still compete there by meeting customer needs with innovative, attractive products.”

He points to his city of Santa Cruz, where “many small manufacturers have substantial international sales due to attractive designs and innovative features.”

Ardelean identifies another possible U.S. small business winner in the proposed accord: wineries and breweries. Small wineries and breweries currently face stiff trade barriers in trying to sell their products in such countries as Malaysia and Vietnam, she says.

“By removing these barriers, some of these wineries and breweries would have access to these countries,” she says. “They will take advantage of the growing incomes in these countries. Over time, consumers in Malaysia will become richer and will be willing to buy more expensive wine.”

Learn more

Those wanting more information can find plenty of resources arguing for and against the proposed Trans-Pacific Partnership, which would cover the U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

• The White House Blog would be a good place to start to understand the Obama administration’s case for the accord. The U.S. Chamber of Commerce has also endorsed the agreement and offers “10 Overlooked Facts About the Trans-Pacific Partnership.”
• On the other side of the debate, the AFL-CIO labor federation has presented its reasons for opposing the pact. Senator Warren, a Massachusetts Democrat, makes her arguments in a blog post.

For more information about how to start and run a business, visit NerdWallet’s Small Business Guide. For free, personalized answers to questions about starting and financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.

Benjamin Pimentel is a staff writer covering small business for NerdWallet. Follow him on Twitter @benpimentel, on Google+ and on LinkedIn.

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Image of container ship nearing port via iStock. Glassman photo courtesy of the University of Washington. Haddad photo courtesy of the University of California, Santa Cruz. Tang photo courtesy of UCLA. Ardelan photo courtesy of Santa Clara University. 

 

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Amortization Basics: How Much Home Do You Own?

When you buy a home, you usually don’t pay the whole price at once. Instead, you finance it with a mortgage and make monthly payments. In this context, amortization is the process of breaking down a mortgage into regular installments. Knowing how it works can help you understand how much of your home you own over time. Here’s a guide to amortization during the life of a typical mortgage loan.

How it works

Let’s say you have a mortgage of $200,000 at a fixed rate of 5% for 30 years, and you made no down payment. The amount you pay each month, $1,073.64, will stay the same over time, so that by the final month your whole mortgage will be paid off.

Within that monthly figure, you pay interest and principal, or a monthly segment of the amount borrowed, $200,000. Together, they equal the monthly payment. So the first few months might look like this:

Month	Payment	Interest	Principal	Amount Owed
1	$1,073.64	$833.33	$240.31	$199,759.69
2	$1,073.64	$832.33	$241.31	$199,518.38
3	$1,073.64	$831.33	$242.31	$199,276.07
4	$1,073.64	$830.32	$243.32	$199,032.75

Every mortgage payment you make has a different mix of interest and principal. From this table, you can see that the interest decreases and the principal increases each month. At first, you pay much more interest than principal, but eventually the proportions reverse.

After that fourth month, you’ve put in only $967.25 toward the home itself. In other words, if you paid $93.70 per square foot for a new single-family house, which is a recent national average from the U.S. Census, then you now own a little more than 10 square feet. That’s the equivalent of about a third of a walk-in kitchen pantry.

Building equity

Each time you pay principal, you add to your equity in the home. Equity is the difference between your home’s appraised market value and your remaining mortgage debt. Toward the latter half of the mortgage, you build equity more quickly since more of your payment goes to reducing the principal than to covering the interest.

In the case above, at the halfway point of a 30-year loan, your monthly interest and principal amounts are almost even, and you’ve paid $64,232.18 of the $200,000 mortgage. From the same U.S. Census metric above, you now own 685.5 square feet, or a 300-square-foot master bedroom, a similar-sized kitchen, one or two closets and the entire walk-in kitchen pantry. Here’s a look at this and other benchmarks:

Month	Payment	Interest	Principal	Amount Owed
180 (15 years)	$1,073.64	$567.81	$505.83	$135,767.82
270 (22.5 years)	$1,073.64	$338.23	$735.41	$80,439.51
360 (30 years)	$1,073.64	$4.45	$1,069.19	$0.00

By the three-quarter mark, or 22 years and 6 months, you have $119,560.49 of equity in the home. In other words, you own another 590 square feet, or roughly enough for a 140-square-foot master bathroom, two 200-square-foot bedrooms and some of the foyer. This is in addition to the previous rooms.

Your final payment consists almost entirely of principal and effectively pays off the mortgage. You now own every square foot in your home.

Understanding how amortization works can help illustrate how much equity you build in your home over time. If you see better mortgage rates down the road, knowing your equity might help you decide whether to refinance or stay the course with your current loan.

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Why Financial Literacy Courses Often Flunk

As April – National Financial Literacy Month – comes to a close, some may puzzle over why so many Americans struggle when it comes to managing their money. After all, there are countless programs available to help them free of charge.

Yet most of these efforts don’t produce long-term results. The evidence can be seen in the millions of people pursued by bill collectors, stuck in debt traps or mired in other avoidable situations each year. The reasons range from inadequate saving, overspending and abusing credit to simply living without a budget.

So what’s wrong with the nation’s approach to Fin Lit education and how can it be fixed? Critics fault established programs, where they exist, for taking an unemotional approach, skipping over the need for basic math skills and offering little reward for developing good habits. There isn’t a national policy on the issue, and more often than not it’s left to parents to help their kids learn money skills.

It’s a huge mistake that financial literacy isn’t taught in every school, experts say. The subject is required learning in just 17 states.

“Too often the hard lessons of financial literacy come from the school of hard knocks,” says Gary Alt, a certified financial planner in Monterey, California. “It would have been better to teach these lessons in the classroom years before so financial disaster could have been averted.”

Another challenge is a lack of math skills. Linda Sherry, director of national priorities for Consumer Action in Washington says studies show some people simply don’t know enough math to make good financial decisions.

Then there’s the tendency to leave emotions out of the conversation. Most financial education programs treat saving and spending as rational decisions, when they’re usually anything but.

“Money is very linked with emotional baggage,” Sherry says. “Money is so emotionally charged, from the time we are in grade school.”

Cultural bias

It doesn’t help that American culture obsesses over material goods, and people grow up feeling judged for their clothes or neighborhood, Sherry says. “There are so many pressures that work counter to making good financial decisions.”

When people do save, watching the amount slowly rise doesn’t provide much emotional kick. Prize-linked savings programs offer an answer and this year became legal at banks and credit unions nationwide. Started six years ago, these programs have helped participants in four states save at least $94 million.

Many financial literacy programs aren’t sufficiently tailored to specific communities, says Tara Alderete, director of education for ClearPoint Credit Counseling Solutions in Atlanta. People don’t always know how to apply what they learn, she says, and may not remember key lessons that aren’t relevant at the time.

Just a quarter of millennials correctly answered four or five financial literacy questions, and the average adult American couldn’t score 60% on such a quiz, according to Financial Industry Regulatory Authority research.

Financial education can be more effective, practitioners say.

“We have to change spending behaviors, and that starts with looking at how we view money and talking about it,” Alderete says. It’s important to understand how people feel about money and get them to recognize sometimes deep-seated emotions the subject can stir. She says it’s a big win to get a client to see the root cause of a negative behavior and change it.

Make it a game

Some researchers believe that using video game concepts and motifs can help young people gain lasting financial skills. Doorways to Dreams, a Boston nonprofit group that helped design prize-linked savings programs, has experimented with games to help children learn personal-finance skills in a fun way. But any lasting results haven’t been determined.

Video games have potential to help people learn better math and money management skills, Sherry says, particularly among those whose lack of math skills may impede smart financial decision making. She’s not alone.

“Video games have proven to be surprisingly effective at teaching many skills, including math and strategy,” Alt says. Others look to the burgeoning array of online and mobile apps designed to help users manage their money and finances. Millennials wedded to their smartphones can keep their bank and credit accounts literally at their fingertips, night and day.

“I think it’s a big miss if we don’t leverage technology,” Alderete says. ClearPoint uses online games offering prizes and savings matches to teach basic skills like budgeting.

People rarely seek to gain financial expertise until it’s actually needed, a tendency exploited by financial services providers that deliver quick answers to consumer questions. But a lasting solution may rely on a slower pace with lots of repetition.

Parental role

Moms and dads may shy from talking about money, but that can confuse kids.

Don’t be afraid to talk about money at the dinner table and let your kids see a snapshot of the household budget, Alderete suggests. If your child complains about not being able to buy something for $20, instead of just saying no, explain what other things $20 can be used for, and ask the kid to prioritize those items. Alderete says it’s vital to seize teachable moments with kids.

“The younger we teach children financial skills, the more second-nature it will become for them as they make important decisions throughout their lives,” says Alt in Monterey. Alderete agrees that it’s vital to seize teachable moments with kids.

While a disturbing number of Americans lack money smarts, the tide may turn as financial literacy programs adopt more effective methods.

Emily Starbuck Crone is a staff writer covering personal finance for NerdWallet. Follow her on Twitter @emstarbuck and on Google+.

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Why Financial Literacy Courses Often Flunk

As April – National Financial Literacy Month – comes to a close, some may puzzle over why so many Americans struggle when it comes to managing their money. After all, there are countless programs available to help them free of charge.

Yet most of these efforts don’t produce long-term results. The evidence can be seen in the millions of people pursued by bill collectors, stuck in debt traps or mired in other avoidable situations each year. The reasons range from inadequate saving, overspending and abusing credit to simply living without a budget.

So what’s wrong with the nation’s approach to Fin Lit education and how can it be fixed? Critics fault established programs, where they exist, for taking an unemotional approach, skipping over the need for basic math skills and offering little reward for developing good habits. There isn’t a national policy on the issue, and more often than not it’s left to parents to help their kids learn money skills.

It’s a huge mistake that financial literacy isn’t taught in every school, experts say. The subject is required learning in just 17 states.

“Too often the hard lessons of financial literacy come from the school of hard knocks,” says Gary Alt, a certified financial planner in Monterey, California. “It would have been better to teach these lessons in the classroom years before so financial disaster could have been averted.”

Another challenge is a lack of math skills. Linda Sherry, director of national priorities for Consumer Action in Washington says studies show some people simply don’t know enough math to make good financial decisions.

Then there’s the tendency to leave emotions out of the conversation. Most financial education programs treat saving and spending as rational decisions, when they’re usually anything but.

“Money is very linked with emotional baggage,” Sherry says. “Money is so emotionally charged, from the time we are in grade school.”

Cultural bias

It doesn’t help that American culture obsesses over material goods, and people grow up feeling judged for their clothes or neighborhood, Sherry says. “There are so many pressures that work counter to making good financial decisions.”

When people do save, watching the amount slowly rise doesn’t provide much emotional kick. Prize-linked savings programs offer an answer and this year became legal at banks and credit unions nationwide. Started six years ago, these programs have helped participants in four states save at least $94 million.

Many financial literacy programs aren’t sufficiently tailored to specific communities, says Tara Alderete, director of education for ClearPoint Credit Counseling Solutions in Atlanta. People don’t always know how to apply what they learn, she says, and may not remember key lessons that aren’t relevant at the time.

Just a quarter of millennials correctly answered four or five financial literacy questions, and the average adult American couldn’t score 60% on such a quiz, according to Financial Industry Regulatory Authority research.

Financial education can be more effective, practitioners say.

“We have to change spending behaviors, and that starts with looking at how we view money and talking about it,” Alderete says. It’s important to understand how people feel about money and get them to recognize sometimes deep-seated emotions the subject can stir. She says it’s a big win to get a client to see the root cause of a negative behavior and change it.

Make it a game

Some researchers believe that using video game concepts and motifs can help young people gain lasting financial skills. Doorways to Dreams, a Boston nonprofit group that helped design prize-linked savings programs, has experimented with games to help children learn personal-finance skills in a fun way. But any lasting results haven’t been determined.

Video games have potential to help people learn better math and money management skills, Sherry says, particularly among those whose lack of math skills may impede smart financial decision making. She’s not alone.

“Video games have proven to be surprisingly effective at teaching many skills, including math and strategy,” Alt says. Others look to the burgeoning array of online and mobile apps designed to help users manage their money and finances. Millennials wedded to their smartphones can keep their bank and credit accounts literally at their fingertips, night and day.

“I think it’s a big miss if we don’t leverage technology,” Alderete says. ClearPoint uses online games offering prizes and savings matches to teach basic skills like budgeting.

People rarely seek to gain financial expertise until it’s actually needed, a tendency exploited by financial services providers that deliver quick answers to consumer questions. But a lasting solution may rely on a slower pace with lots of repetition.

Parental role

Moms and dads may shy from talking about money, but that can confuse kids.

Don’t be afraid to talk about money at the dinner table and let your kids see a snapshot of the household budget, Alderete suggests. If your child complains about not being able to buy something for $20, instead of just saying no, explain what other things $20 can be used for, and ask the kid to prioritize those items. Alderete says it’s vital to seize teachable moments with kids.

“The younger we teach children financial skills, the more second-nature it will become for them as they make important decisions throughout their lives,” says Alt in Monterey. Alderete agrees that it’s vital to seize teachable moments with kids.

While a disturbing number of Americans lack money smarts, the tide may turn as financial literacy programs adopt more effective methods.

Emily Starbuck Crone is a staff writer covering personal finance for NerdWallet. Follow her on Twitter @emstarbuck and on Google+.

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Report: Uber Testing a Delivery Service

Need a diamond ring or stylish handbag right now? Just hail an Uber.

That could be an option in the near future if a report Wednesday from TechCrunch proves true.

The folks behind the popular ride-hailing app are quietly testing a massive delivery service that would let users get same-day delivery of items from participating retailers, the tech blog reported.

Neiman Marcus, Louis Vuitton, Tiffany’s, Cohen’s Fashion Optical and Hugo Boss are among more than 400 retailers either in talks or already testing the service with Uber, according to the report, which cites multiple unnamed sources.

TechCrunch said it has obtained training documents for drivers who are involved in the pilot program.

READ: How to get a high (or low) Uber passenger rating

The company already has a program called UberRUSH, which lets users in select areas send deliveries via the car service. Similar test programs feature deliveries of fresh produce and restaurant meals. But the system in the works would be far more expansive and work more directly with retailers, the blog said.

“Experimenting and finding new, creative ways for the Uber app to provide even greater value to our riders and driver partners is a way of life at Uber,” the company said in a statement to TechCrunch. “We have been piloting UberRUSH with multiple retailers for the last year.”

Drivers testing the program currently are using a separate app for deliveries from what appear to be primarily high-end retailers. But, ultimately, they’ll be able to take orders and pick up riders using the same Uber app.

Doug Gross is a staff writer covering personal finance for NerdWallet. Follow him on Twitter @doug_gross and on Google+.

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Americans Not Paying Bills on Time — and Why That’s Bad

Paying your bills on time can save you money. You’ll avoid late payment fees and penalty interest rates, and also maintain or build good credit, which can help you get approved for favorable loan terms.

Yet, many Americans — especially those in their 20s and early 30s —  struggle to get their bills paid on time, according to a recent study by the National Foundation for Credit Counseling. Here’s what you need to know about the importance of keeping up with your bills, as well as tips to make sure you don’t miss your due dates.

Many consumers are missing deadlines

Roughly 1 in 4 U.S. adults don’t always pay their bills on time, according to the NFCC’s 2015 Financial Literacy Survey, sponsored by NerdWallet. Among U.S. adults ages 18 to 34, just over half are paying their bills on time and have no accounts in collection.

It’s crucial to credit health to pay your bills on time and avoid having your accounts sold to collection agencies. These go hand in hand: If you’re paying your bills on time, none of them should go into collection.

Why it’s so important to pay your bills on time

Late payments can result in late fees, increased interest rates and a damaged credit score. Let’s dive into that last problem, which can affect your ability to obtain loans at the best possible rates and limit your options for years to come.

A good credit score is important for many reasons. While you may know that excellent credit can get you the most favorable terms on future loans, you might not realize that it can also get you approved for utilities and new cellphone plans, as well as affordable car insurance. It can also mean that you get approved for an apartment that you otherwise wouldn’t have gotten.

There are several different credit scoring models, but the most widely used are FICO scores, based on algorithms developed by the Fair Isaac Corp. Your FICO scores are made up of the following five factors:

• Payment history (35%)
• Amounts owed (30%)
• Length of credit history (15%)
• Types of credit in use (10%)
• New credit (10%)

Payment history is the most important factor of your credit score, and having 100% on-time payments puts you in the best position to have a healthy credit score. While a payment made a day or two late probably won’t be reported to the credit bureaus, you should aim for on-time payments all the time. At the least, this will save you from late payment fees and penalty APRs.

How to deal if you’ve missed payments

If you’re struggling to make payments because you forget the due dates, consider setting up automatic payments or having email/text reminders sent to you a few days before your due date. If you lack the financial resources to make your payments on time, start by considering how you can earn more and spend less. If your financial situation is dire, check out our tips for getting help when you’re deep in debt.

When dealing with past late payments, it’s important to keep perspective. Even the worst financial mistakes will eventually fall off your credit report and stop hurting your credit score, provided you start making good credit decisions now.

What can I do now?

If you’ve had trouble with late payments in the past, the best time to start building your credit back up is now. Use our tips above to start paying bills on time. Create a debt payment plan to knock out your existing debt balances — which will give you fewer accounts to make payments on from month to month.

Perhaps most important, don’t beat yourself up for past mistakes. Not only will late payments fall off your credit report in around seven years, but over time they’ll likely affect your credit score less and less.

Erin El Issa is a staff writer covering personal finance for NerdWallet. Follow her on Twitter @Erin_Lindsay17 and on Google+.

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Q&A: Greater Dallas Hispanic Chamber Supports the Growth of Small Businesses

Edgar Sotelo owns Southwest Packaging Solutions, a small contract packaging company in Dallas. In 2012, his young company was in search of support to take the business to the next level.

“We did not have a good company structure, our training was lacking, we did not understand financials, and did not have a network strategy — in other words, we were just letting the business run itself,” says Sotelo.

That, said Sotelo, is when he joined the Greater Dallas Hispanic Chamber of Commerce, whose mission is to grow and support the Hispanic business community in North Texas. Sotelo said that in 2012 he took Interise’s StreetWise MBA program, a course for small business owners that’s sponsored by the GDHCC. Interise is a non-profit organization that aims to stimulate economic growth in lower income communities, and its course had a huge impact on the company’s operations and its growth, according to Sotelo.

“The program helped us develop an attainable business plan and gave us access to capital,” Sotelo says. “Since then, we have doubled our revenue, have systems in place, our corporate structure is more efficient, we are actively participating in networking events, many of them through the chamber. We have also developed some really good relationships that have benefited us in the personal and professional level.”

Silvana Rosero, president of Small Pond Video Productions, joined the GDHCC in 2012 and won a Quality and Excellence Award, which recognizes local businesses that have “exhibited innovation, community involvement and dedication,” according to the chamber’s website.

Silvana Rosero

“The chamber is a big advocate on behalf of our businesses — they make the connection between large opportunities around town and connect them to the membership, making sure we are included and we know about these opportunities,” she says.

NerdWallet recently spoke with chamber President Rick Ortiz to learn more about the region’s economy, some of the common challenges facing local business owners, how the chamber supports the advancement and economic growth of the Hispanic business community, and other useful local resources for businesses.

NerdWallet: Can you tell us about the Greater Dallas economy?

Ortiz: It’s been for the most part a strong economy. As a whole, it wasn’t as affected by some of the recent financial and economic challenges that the country as (a) whole has faced. And so we’ve had a pretty steady and strong local economy as a whole for the North Texas region.

We have a lot of companies, from across the country, that have been moving into the area.

Most recently, Toyota has made their big announcement and is in the process of getting everything moved here. State Farm is another. You’ve got many different companies that are moving into this area because of the local economy, business-friendly environment, there’s not a state income tax and there’s a lot of space. What you can pay for out here goes a long way versus some other parts of the country.

Can you tell us a little bit more about the Greater Dallas Hispanic Chamber of Commerce?

Last year we celebrated 75 years, so it was a big year for this organization. It started off as an organization in 1939 that was built on advocacy, at the time for the Mexican-American community, in what was then called “Little Mexico” here. For those business owners, they formed the organization really to help create opportunities for themselves and their families, and it grew into a membership-driven organization that continued to be advocacy-focused for members and started to chip into areas that were really helping generate new opportunities, through programs.

Rick Ortiz

We’ve got several programs that are economic-development programs, from the start-up phase and above. We have business assistance centers that are funded through (the Department of Housing and Urban Development) dollars and through our partnership with the city, so it’s a grant that comes through the City of Dallas and a contract that we have with the city. In this particular center, we work with start-ups in the Dallas community, and we work with the low- to moderate-income community.

Predominantly, it’s been Hispanics that have come through the GDHCC doors to come to the center, and we work with them on self-employment. It’s about creating businesses for them, working with them to start a business plan, understanding what it takes to start a business, but understanding that it is an option for those who feel like they don’t have one.

We’ve got another great program called Stars on the Rise that for 32 years has awarded scholarships to area scholars graduating from high school. We’ve awarded close to $30 million in scholarship dollars to area scholars since 1983. And those are just a couple of the programs we offer.

What are some of the main challenges Hispanic business owners face?

Finding ways to get more opportunities for Hispanic-owned and minority-owned businesses comes with the challenge that some of those businesses are not ready. That’s been a big challenge, for any business really, and that’s a realistic challenge; we don’t want them to go into something where they bite off more than they can chew, because it makes everybody look bad.

So, we work to build these capacity-building programs, from helping them get access to capital, or understanding a process, because that was one of the biggest challenges, too, in not knowing how to do business, getting them to understand how to actually bid for the work. You’d be surprised how many people didn’t understand that process. So, they couldn’t get in the door to be considered for the work. We had to work with them on that, and understanding how to keep the work, and continue to grow as a business.

Do you think financing is a big issue for small businesses, and where are local businesses turning for financing?

I can speak for our members: Financing is definitely a big issue, at the top of the list. Really, what has been successful is working with them to get to a point where they are bankable, and working with them to make sure they get to that point. From the lending side, we have banks that are partners that are involved, from JP Morgan Chase, to Wells Fargo, to Comerica and Bank of America.

But we also have certain lending restrictions that you have to meet, and sometimes we find that we work well too with some of the microlenders. We have PeopleFund here that is a very strong partner. We have The Lift Fund, which used to be Accion Texas. These are all microlenders that we work with that have a little more of relaxed criteria for small businesses. The amounts may be smaller, but you’d be surprised at how far these businesses can go with something that provides them that opportunity.

What are some other useful resources for small business owners in the area?

That’s a great question, because I think part of our overall strategy is collaborating and community partnerships with those that complement what we offer.

For instance, certification councils like the Dallas-Fort Worth Minority Supplier Development Council provides the Minority Business Enterprise Certification. Many of the private sector companies that are partners and that do business with these suppliers that are members, they will look for that certification. So we encourage our members who qualify for that, to go through that process, because that’s another opportunity for them.

Same thing with the Women’s Business Council. They offer the Women’s Business Enterprise certification that works for the private sector, and to some extent, the public sector. So those are opportunities where we work with our members to make sure they are giving themselves every opportunity.

If you could give one piece of advice to small business owners, what would it be?

What I always tell our members that are new here is to use the chamber as a resource, as an extension to your company, because they can’t do everything, especially the smaller ones. It’s like a company — a large corporation has different departments that do different things, whether it’s marketing or human resources.

Small businesses many times do not have that luxury, and you have a small business owner that is wearing many hats at one time. So what we offer through our economic development program is an extension to that, so you’re not up at 3 a.m. trying to understand what the (Small Business Administration) requires, or different things that are not easy to understand. Use the membership to your advantage, because we’re really here to serve as a resource. 

Is there anything else you want to add?

We have programs that are a little more industry specific, too. We have two programs, one that was launched a couple of years ago, called the Executive Entrepreneur Program, that is for more established businesses. We’re launching a loan readiness program this summer. That is a big program that will help businesses become bankable. 

For more information about how to start and run a business, visit NerdWallet’s Small Business Guide. For free, personalized answers to questions about starting and financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.

Steve Nicastro is a staff writer covering personal finance for NerdWallet. Follow him on Twitter@StevenNicastro and on Google+.

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Main photo and portrait of Silvana Rosero courtesy of Small Pond Video Productions.
Photo of Rick Ortiz courtesy of Greater Dallas Hispanic Chamber of Commerce.

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