Business

Blacks Least Likely to Get Business Loan from Banks

Published

9 years ago

May 26, 2015

Oakland Post

Ron Busby urges personal relationship with banker (Courtesy Photo)

By Freddie Allen
Senior Washington Correspondent

WASHINGTON (NNPA) – Black-owned businesses face tougher challenges than other groups when seeking bank loans, according to a new study by the Gallup polling company commissioned by Wells Fargo.

Nearly half (47 percent) of Black-owned businesses operate in the South and the study found that 77 percent of Black business owners use personal cash to finance their businesses.

African-American business owners were less likely to borrow money for business reasons than Asian and Hispanic business owners.

“Twenty-two percent of African American business owners say they felt that discrimination from a financial institution based on their race, ethnicity, gender or sexual orientation had impacted their chances to obtain credit for their business,” stated the report. “Among those who indicated they needed credit, African American owners, in particular, say they were not able to get all the credit they needed.”

According to the report, 13 percent of Black business owners obtained the credit they needed, compared to 20 percent for Hispanic owners, 24 percent of Asian owners and 23 percent of owners in general.

The report also found that the larger the loan request, the higher the rejection rate. Overall, 27 percent of applications for larger loans were turned down and only 7 percent for smaller ones.

The highest rejection rate – 38 percent – was among Black business owners seeking a loan of at least $250,000; 17 percent of Blacks seeking a loan less than $50,000 were rejected. By comparison, 33 percent of Asian owners were turned down for larger loans and 14 percent for smaller ones. For Latino business owners, the rejection rate was 26 percent for large loans, and 15 percent for smaller ones.

Once banks declined a loan to Black business owners, they needed they were more likely to apply for credit again than other small business owners.

In a statement, Lisa Stevens, the head of Small Business for Wells Fargo, said that serving diverse communities has long been a focus area and priority.

“For this reason, we commissioned the Gallup study, which gave us new insight into the perceptions and experiences of diverse business owners working with banks, and how we can improve as a company and as an industry,” said Stevens.

In an interview, Ron Busby, president of the U.S. Black Chambers, Inc., said there is some good news amid the bad.

“If we’re being successful with the limited amount of resources that we have today, our future looks wonderful,” said Busby. “I think for Black businesses to be successful, they need to go in proactively. They need to have established relationships with their bankers early on before there’s an opportunity.”

Busby continued: “When they’re first thinking about starting a business, they need to start a relationship with their banker.”

In an effort to address some of the challenges affecting minority business owners related to the lending industry, Wells Fargo committed to a four-point plan that includes more education and credit coaching for borrowers and $75 million in grants and investments in micro-lending programs aimed at diverse business communities.

“We know that in order to address the range of financial needs within all of our communities, we need to support and work with the ecosystem of organizations that serve small businesses,” said Jon Campbell, executive vice president, government and community relations for Wells Fargo, said in a statement. “Through this increased investment and connections with community lending organizations, we are making meaningful strides toward increasing access to capital for small businesses, as well as helping more business owners get the coaching and educational resources they need to succeed financially long-term.”

Oakland Post

Posts by Oakland Post

Up Next

5 Key Trends In Online Marketing and How to Build Your Strategy

Don't Miss

Public-Sector Jobs Vanish, Hitting Blacks Hard

Oakland Post

Click to comment

Activism

Oakland Post: Week of October 30 – November 5, 2024

The printed Weekly Edition of the Oakland Post: Week of October 30 – November 5, 2024

Published

21 hours ago

November 1, 2024

Oakland Post

To enlarge your view of this issue, use the slider, magnifying glass icon or full page icon in the lower right corner of the browser window.

Oakland Post

Posts by Oakland Post

Business

Chevron Reports Progress in Flaring, Emissions at Community Town Hall

At the first in a series of community town halls on Oct. 16, Chevron Richmond reported a reduction in year-over-year flaring incidents, both in number and duration, and detailed new technologies and processes that will further drive down emissions and heighten community awareness about operations. Chevron employees also answered questions from the community and listened to concerns at the town hall, which was hosted by Ceres Policy Research and held at CoBiz in downtown Richmond.

Published

5 days ago

October 28, 2024

Oakland Post

Community member Kathleen Sullivan speaks at the Chevron town hall. Photo courtesy Richmond Standard.

By Mike Aldax

The Richmond Standard

Chevron employees also answered questions from the community and listened to concerns at the town hall, which was hosted by Ceres Policy Research and held at CoBiz in downtown Richmond.

Similar town halls will be held twice per year over the next five years as part of a settlement agreement with the Bay Area Air Quality Management District (BAAQMD).

The goal is to increase transparency about flaring and increase opportunities for the community to get answers to their questions about potential impacts to the community.

A key output is the creation of a Community Action Plan, or CAP. The CAP aims to create a two-way dialogue between Chevron and neighbors around flaring and environmental compliance.

“Chevron’s focus in this process is one of learning and engagement,” said Brian Hubinger, public affairs manager at Chevron Richmond. “We felt the most efficient way was to bring together a broad selection of community members rather than just think about what it would take to comply with the settlement agreement.”

The first town hall drew a few dozen members of the community, including Chevron employees, representatives of fence-line neighborhoods and members of local environmental organizations.

During the event, Chevron employees reported that 19 BAAQMD-reportable flaring incidents occurred at the refinery from October 2022 to September 2023 with a total duration of 270 hours. During the same period this year, 18 flaring incidents occurred with a total duration of 159 hours, marking a 41% decrease in duration.

Further gains are expected with the implementation of Flare IQ, set to be installed this year and next on all of the refinery’s flaring systems. Flare IQ is described as a supercomputer with an algorithm that gathers data from operations and enables employees to address potential issues before they occur.

Chevron also reported a 40% decrease in particulate matter emissions since the completion of the refinery modernization project in 2018.

In addition, flare gas volume related to Chevron’s new hydrogen plant project, built as part of the modernization project, decreased by 85% since 2019. The hydrogen plant has also reportedly made the refinery 20% more efficient.

“We’re really proud about that,” said Kris Battleson, manager of health, safety and environment at Chevon Richmond.

Neighborhood council leaders joined the president of the local NAACP in lauding the effort toward transparency and accountability. Among them was Vernon Whitmore, president of the Sante Fe Neighborhood Council and member of the 15-person CAP committee.

“The way we were able to talk openly and freely with Chevron – honestly, bluntly and frankly – while developing this program was very good,” Whitmore said. “And it was something that was well-needed at this time.”

Still, residents are skeptical, including Kathleen Sullivan, a longtime community advocate who also serves on the CAP committee. But she added, “you can’t complain about something and not be involved in the solution.”

Oakland Post

Posts by Oakland Post

Bay Area

S.F. Mayor London Breed Meets with Black Businesswomen Supporting Her Campaign

San Francisco Mayor London Breed met with 50 supporters at Cafe 22 in San Francisco’s Union Square hosted by cafe owner LaRonda “Sug” Smith, who is also president of the Enterprising Women Networking SF Chapter of the American Business Women’s Association. Wearing a royal blue pantsuit, Breed happily greeted the group of seniors, business owners, and longtime community members.

Published

5 days ago

October 28, 2024

Oakland Post

San Francisco Mayor London Breed addresses her supporters at a Meet and Greet at Cafe 22 on Mason Street in Union Square. Photo By Carla Thomas.

By Carla Thomas

Wearing a royal blue pantsuit, Breed happily greeted the group of seniors, business owners, and longtime community members.

The mayor stated that the race is a close one competing with wealthy opponents, however she feels confident in her track record of accomplishments, qualifications and being a native San Franciscan.

“My opponents may have the money, but I’ve got the people,” she said .

In response to COVID-19’s impact on Black-owned and serving businesses, in 2020 Mayor Breed launched the African American Revolving Loan Fund, providing zero-interest loans of up to $50,000.

In 2022, Mayor Breed ensured the loans nade to 51 businesses were forgiven. Through her ‘Opportunities for All’ initiative she ensured all 13- 24-year-olds have access to paid internships and a career pathway. Since its launch in 2018, the program has made over 10,000 placements. Ninety-five percent were people of color and 23% were African American.

In 2022, Mayor Breed launched the Black 2 San Francisco initiative hosting HBCU, Historically Black Colleges and Universities for summer programming, a part of her downtown economic recovery and revitalization efforts.

Launched in partnership with the San Francisco Department of Public Health and Expecting Justice, Breed provided a monthly income of $600-$1000 to expecting mothers of color to reduce the economic stress that leads to racial birth disparities.

The program was the first of its kind in the nation and will expand from 150 recipients to 425. Breed helped fund a new small business hub at the City’s African American Arts and Cultural District.

In 2021, Mayor Breed proclaimed Juneteenth as an official City holiday, celebrating the Black community’s resilience and emergence from slavery.

Mayor Breed also reinvested $60 million of City funds annually to assist the City’s Black community in breaking a cycle of poverty.

Business training assisted 350 entrepreneurs,

Over 50 businesses entered or renewed leases,
1,000 residents completed workforce training,
Over 50 families and seniors secured mortgages and 6,000 households were provided nutritional support.
1,000 hours of mental health support and 38,000 young people were provided support
Nearly 1,000 youth recieved literacy and mentorship support, and nearly 40 educators were supported.

“A people that are 5% of the population, should not be 40% of the homeless population or condemned to poverty,” said Breed. “It’s not all about the numbers, but the overall disparity.”

Breed says she understands the plight of the underserved and is a mayor for all people but the data shows the African community left behind.

“When you uplift a community, you uplift the City and we invested in the Latino communities and in the Stop Asian Hate movement with resources to address those challenges,” said Breed. “Because ultimately, as mayor, it is my job to serve and protect all of the City.” “I’ve helped over 20,000 exit homelessness and increased our shelter capacity by 70%.”

The attacks Mayor Breed has experienced recently have reminded her that being a Black woman, you have to work twice as hard and yet be unfairly and overly scrutinized. However, Breed says she will continue to fight to lead San Francisco for another term.

“Mayor London Breed is for our people and all people in this city,” said LaRonda Smith who was awarded a proclamation from the mayor’s office. “This city is her community, she cares and has supported so many communities, organizations, and small businesses to prove it.” The event also served a celebration of Cafe 22’s three years in business at 325 Mason St. in San Francisco.

Attendees included business owners Del Seymour of Code Tenderloin, Velma Landers and Idella Hill of the ABWA, and Julianne Banks.