By Bria Overs | Word In Black
(WIB) – Access to capital — that’s the number one hurdle for Black-owned businesses. Now, a new partnership between the United States Black Chamber, Inc. (USBC) and Lendistry may be just the tool to help underserved entrepreneurs.
This new initiative, a lending portal, will give minority, women, and veteran-owned small businesses access to capital “specifically crafted to meet their distinct needs and goals.”
“We know that in our communities, typically, we don’t have financial institutions,” Ron Busby Sr., president and CEO of USBC, says. “That’s why this platform is so wonderful because now you can use this portal, regardless of where you are in the country, to apply for the funds you need.”
Founded in 2009, the USBC is an advocacy nonprofit supporting African American Chambers of Commerce and business organizations nationwide. It focuses on economic empowerment and developing and growing Black-owned businesses.
“We are trying to address a lot of the challenges and remove barriers for our businesses to be able to continue to grow — pay an equitable amount for the capital they need,” Busby says.
Lendistry, founded by Everett K. Sands, is a first-of-its-kind, Black-led Community Development Financial Institution (CDFI) and national small business lender. They provide economic opportunities, funding, and financial education for small business owners and underserved communities.
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“I think one of the beauties of the partnership is that business owners get to connect with their local U.S. Black Chamber group, and they’ll be able to get some of that technical assistance, business, advising, etc.,” Sands says. In addition, entrepreneurs can turn to this portal and Lendistry to find ways to fund their needs, whether for working capital or debt consolidation, business acquisition, business expansion, commercial real estate, and more.
According to USBC, by using the portal, business owners can:
- Get access to funds faster/in as little as five days
- Get loans ranging from $25,000 to $5,000,000, with loan terms of up to 10 years
- Get competitive interest rates
To qualify, they will need to:
- Be in business for at least two years
- Be a for-profit, nonprofit, sole proprietorship, C-corps, S-corps, partnership, or LLC
- Provide a financial report
Business owners of color reported heavily relying on their personal savings or getting money from family and friends, according to the Federal Reserve’s 2023 Report on Startup Firms Owned by People of Color. 28% of those who have employees reported receiving funding from financial institutions or lenders. For white-owned startups with employees, 48% received funding from financial institutions.
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According to the report, the 2022 Small Business Credit Survey showed that new companies were more likely than older businesses to feel discouraged about borrowing. It explains: “They did not apply because they did not think they would be approved. Lenders may have revenue thresholds, collateral requirements, or expect several years of financial statements that startup firms are often unable to provide.”
“There is a perceived risk that people of color, and specifically Black people, who run small businesses do not pay their bills back or are not good lending candidates,” Sands says. “The more Lendistry can show the data, information, and what has happened, the more access to capital will come to our communities.”