US minority-owned businesses have $1.3 trillion growth potential, JPMorgan says

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NEW YORK, Nov 28 (Reuters) – Mid-sized U.S. businesses owned by minorities have untapped revenue potential worth $1.3 trillion annually, JPMorgan Chase (JPM.N) found in a study on a segment where major lenders are chasing growth.

These minority-owned business enterprises represent roughly 30% of the middle market but generate only 20% of the total revenue and closing this gap could boost the economy, the study said.

“Midsize businesses are critical to the health of our economy and communities and bridging this gap can be a big opportunity,” Terry Hill, co-head of Emerging Middle Market, JPMorgan Chase Commercial Banking told Reuters.

JPMorgan, the largest U.S. lender, has been looking at serving this segment by tapping expertise from its corporate and investment banking businesses, while Bank of America (BAC.N) plans to double its middle-market dealmaking team.

The report identified diverse-owned businesses as those run by Blacks, Latinos, Asians, other people of color, women and veterans.

“There are approximately 300,000 midsize businesses across the U.S. that generate $13 trillion in annual revenue and employ more than 40 million people,” the report said.

Some of these mid-size businesses have had challenges including difficulty in accessing capital, obtaining the right information compared to their counterparts, and creating suitable business plans, it said.

The study was conducted by Next Street, an advisory firm which analyzed data from the middle market segment focusing on firms that generate an annual revenue of anywhere between $11 million to $500 million.

JPMorgan has been beefing up its commercial and industrial banking business by expanding into new geographies and increasing its headcount.

The bank’s broader commercial bank has nearly 25,000 clients, including mid-sized businesses and corporations, government entities and non-profits and more than 33,000 real estate investors or owners.

Reporting by Nupur Anand in New York; Editing by Sonali Paul

Our Standards: The Thomson Reuters Trust Principles.

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Nupur Anand is a U.S. banking correspondent at Reuters in New York. She focuses on JPMorgan Chase, Wells Fargo and regional banks. Anand covered banking and finance in India for more than a decade, chronicling the collapse of major lenders and turmoil at digital banks and cryptocurrencies. She has a degree in English literature from Delhi University and a postgraduate diploma in journalism from the Indian Institute of Journalism & New Media in Bangalore. Anand is also an award-winning fiction writer.

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