Welcome to Breaking the Blueprint — a weblog collection that dives into the distinctive enterprise challenges and alternatives of underrepresented enterprise homeowners and entrepreneurs. Learn the way 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 group because the late 1800s once they have been based to struggle in opposition to the financial inequality Black People felt in accessing monetary providers.
Regardless of being in a brand new millennium, these banks are nonetheless a few 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 should 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 People. 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. A couple of years later, 9 businessmen based Mechanics and Farmers Financial institution (now M&F Financial institution) in Durham, North Carolina, in 1907. They have been among the many 134 Black-owned banks that served the Black group 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 present.
Nonetheless, many Black entrepreneurs discover the assist they want with these companies, and they’re priceless instruments for creating monetary literacy and beginning entrepreneurial ventures. Under we’ll focus on how you should use Black-owned banks to start out your small business.
Easy methods to Use Black-Owned Banks to Begin Your Enterprise
1. Open accounts
Black-owned banks supply many account choices for enterprise homeowners. You may open enterprise accounts at banks like Alamerica Financial institution and Carver State Financial institution that supply in-person branches and on-line and cell banking to entry your accounts from wherever you might be, every time you have 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 affords lending packages within the type of small enterprise or industrial actual property loans.
OneUnited Financial institution and Harbor Financial institution of Maryland have been amongst some Black-owned banks that supplied PPP loans for enterprise homeowners in the course of the early days of the pandemic. Harbor Financial institution of Maryland funded 694 PPP loans that totaled $66 million all through the pandemic. A lot of the loans have 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 People credit score alternatives, or they obtain much less credit score than they request, in line with Federal Reserve information.
Given this, Black-owned banks are a necessary supply of credit score for Black entrepreneurs. Many supply a spread of bank card choices, and a few Banks, like Citizen Belief Financial institution, assist prospects find out about constructing and sustaining credit score.
4. Obtain monetary schooling.
Black-owned banks supply alternatives exterior conventional banking providers, like schooling and monetary literacy packages for underserved communities.
Industrial Financial institution, for instance, works to strengthen the financial system via partnerships and monetary schooling seminars for Black-owned companies. It reinvests over 60% of its belongings into its communities yearly, and groups of skilled bankers present hours of monetary schooling seminars for patrons.
M&F Financial institution additionally affords a monetary literacy course that helps small enterprise homeowners discover ways to companion with monetary professionals, develop their companies, and develop monetary abilities.
5. Get assist.
Uplifting the group has at all times been a precedence for Black People. 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 People.
Black-owned Banks Lie on the Forefront of Change
Black-owned banks could be one of the 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.
