Welcome to Breaking the Blueprint — a weblog sequence that dives into the distinctive enterprise challenges and alternatives of underrepresented enterprise homeowners and entrepreneurs. Find out how they’ve grown or scaled their companies, explored entrepreneurial ventures inside their firms, or created aspect hustles, and the way their tales can encourage and inform your personal success.
Black-owned banks have been pillars of the Black neighborhood because the late 1800s once they had been based to combat in opposition to the financial inequality Black Individuals felt in accessing monetary providers.
Regardless of being in a brand new millennium, these banks are nonetheless a number of the few establishments that supply equitable assist for Black enterprise homeowners. Learn on to be taught extra in regards to the historical past of Black-owned banks and the way you need to use them to start out your small business.
The Historical past of Black-Owned Banks
Freedman’s Financial savings and Belief Firm was the primary financial institution to serve previously enslaved individuals in 1865. Capital Financial savings Financial institution opened in 1888 in Washington, D.C., as the primary financial institution organized and operated by Black Individuals. A yr later, The True Reformers Financial institution in Richmond, Virginia, turned the primary chartered Black-owned financial institution within the nation.
Maggie Lena Walker turned the nation’s first Black feminine banker when she based The St. Luke Penny Financial savings Financial institution in Richmond, Virginia, in 1903. Just a few years later, 9 businessmen based Mechanics and Farmers Financial institution (now M&F Financial institution) in Durham, North Carolina, in 1907. They had been among the many 134 Black-owned banks that served the Black neighborhood from 1888 to 1934.
Sadly, the variety of Black-owned monetary establishments has decreased considerably, as Black-owned monetary establishments declined over 50% from 2001 to 2018, and there are solely 19 Black-owned banks at the moment.
Nevertheless, many Black entrepreneurs discover the assist they want with these companies, and they’re worthwhile instruments for creating monetary literacy and beginning entrepreneurial ventures. Beneath we’ll focus on how you need to use Black-owned banks to start out your small business.
Methods to Use Black-Owned Banks to Begin Your Enterprise
1. Open accounts
Black-owned banks provide many account choices for enterprise homeowners. You possibly can open enterprise accounts at banks like Alamerica Financial institution and Carver State Financial institution that supply in-person branches and on-line and cellular banking to entry your accounts from wherever you might be, each time you want to.
2. Apply for loans.
Banks like OneUnited Financial institution and Harbor Financial institution of Maryland make it simpler for Black entrepreneurs to entry and develop capital with lending packages.
For instance, OneUnited Financial institution gives lending packages within the type of small enterprise or business actual property loans.
OneUnited Financial institution and Harbor Financial institution of Maryland had been amongst some Black-owned banks that supplied PPP loans for enterprise homeowners through the early days of the pandemic. Harbor Financial institution of Maryland funded 694 PPP loans that totaled $66 million all through the pandemic. Many of the loans had been issued to Baltimore, Washington, D.C., and Virginia companies.
3. Construct credit score.
Many entrepreneurs use credit score to ascertain their companies, however, sadly, monetary establishments disproportionately deny Black Individuals credit score alternatives, or they obtain much less credit score than they request, based on Federal Reserve knowledge.
Given this, Black-owned banks are a necessary supply of credit score for Black entrepreneurs. Many provide a variety of bank card choices, and a few Banks, like Citizen Belief Financial institution, assist prospects study constructing and sustaining credit score.
4. Obtain monetary training.
Black-owned banks provide alternatives outdoors conventional banking providers, like training and monetary literacy packages for underserved communities.
Industrial Financial institution, for instance, works to strengthen the financial system by means of partnerships and monetary training seminars for Black-owned companies. It reinvests over 60% of its property into its communities yearly, and groups of skilled bankers present hours of monetary training seminars for patrons.
M&F Financial institution additionally gives a monetary literacy course that helps small enterprise homeowners discover ways to associate with monetary professionals, develop their companies, and develop monetary abilities.
5. Get assist.
Uplifting the neighborhood has all the time been a precedence for Black Individuals. Black-owned banks prioritize supporting their communities by offering coaching alternatives and jobs for his or her prospects.
Carver Federal Financial savings Financial institution is a superb instance, providing community-focused banking for underserved neighborhoods. It focuses on creating dependable, long-term relationships with its prospects, strengthening the general financial development of Black Individuals.
Black-owned Banks Lie on the Forefront of Change
Black-owned banks could be the very best supply of success for Black entrepreneurs, serving to folks develop monetary literacy, construct credit score, and get the capital they should pursue their ventures.
