Welcome to Breaking the Blueprint — a weblog collection 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 facet hustles, and the way their tales can encourage and inform your individual success.
Black-owned banks have been pillars of the Black group for the reason that late 1800s once they had been based to combat towards the financial inequality Black People felt in accessing monetary providers.
Regardless of being in a brand new millennium, these banks are nonetheless among the few establishments that supply equitable assist for Black enterprise homeowners. Learn on to study extra concerning the historical past of Black-owned banks and the way you should utilize them to begin your enterprise.
The Historical past of Black-Owned Banks
Freedman’s Savings and Trust Company was the primary financial institution to serve previously enslaved individuals in 1865. Capital Savings Bank opened in 1888 in Washington, D.C., as the primary financial institution organized and operated by Black People. A yr later, The True Reformers Bank 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 Savings Bank in Richmond, Virginia, in 1903. A number of years later, 9 businessmen based Mechanics and Farmers Bank (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 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 right this moment.
Nonetheless, many Black entrepreneurs discover the assist they want with these companies, and they’re helpful instruments for growing monetary literacy and beginning entrepreneurial ventures. Under we’ll talk about how you should utilize Black-owned banks to begin your enterprise.
The right way to Use Black-Owned Banks to Begin Your Enterprise
1. Open accounts
Black-owned banks supply many account choices for enterprise homeowners. You possibly can open enterprise accounts at banks like Alamerica Bank and Carver State Bank that supply in-person branches and on-line and cellular banking to entry your accounts from wherever you’re, at any time when it’s essential.
2. Apply for loans.
Banks like OneUnited Bank and Harbor Bank of Maryland make it simpler for Black entrepreneurs to entry and develop capital with lending applications.
For instance, OneUnited Financial institution presents lending applications within the type of small business or commercial real estate loans.
OneUnited Financial institution and Harbor Financial institution of Maryland had been amongst some Black-owned banks that supplied PPP loans for enterprise homeowners throughout 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 People credit score alternatives, or they obtain much less credit score than they request, in keeping with Federal Reserve data.
Given this, Black-owned banks are a necessary supply of credit score for Black entrepreneurs. Many supply a variety of bank card choices, and a few Banks, like Citizen Trust Bank, assist clients 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 applications for underserved communities.
Industrial Bank, for instance, works to strengthen the financial system via partnerships and monetary schooling 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 schooling seminars for purchasers.
M&F Bank additionally presents a monetary literacy course that helps small enterprise homeowners learn to companion with monetary professionals, develop their companies, and develop monetary expertise.
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 clients.
Carver Federal Savings Bank is a superb instance, providing community-focused banking for underserved neighborhoods. It focuses on growing dependable, long-term relationships with its clients, strengthening the general financial development of Black People.
Black-owned Banks Lie on the Forefront of Change
Black-owned banks may 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.
