By Dianne Anderson
Whatever the financial question, race is likely a leading factor in the real world where the color of money is mostly green and white.
Grants, contracting dollars and bids on RFPs can get competitive, but local financial experts are looking to forge new alliances, helping Black and Brown businesses grow as they learn from the pros.
Beyond the business side of it, a recent launch event to introduce the Access Commitment program in the Inland Empire, covered an assortment of home financing products. They are also using local loan officers to help serve communities they already serve, which in turn, helps build more generational wealth.
Heli Castaneda said that through US Bank’s Business Diversity Lending Program, some top offerings include modified credit guidelines for qualified business owners to tap the capital needed to run their businesses.
“Through the program, women-, minority- and veteran-owned businesses are eligible for reduced credit score and decreased cash flow coverage requirements on most conventional lending products up to $2.5 million. Small businesses are eligible if they are at least fifty-one percent owned and operated by one or more individuals who self-identify as a woman, minority, and/or veteran,” said Castaneda, Business Access Advisor, U.S. Bank.
On their website, US Bank reports through their “Bank Access Commitment, $321 million in capital went to Black-owned or Black-led businesses and organizations through U.S. Bancorp Impact Finance financing. Also, $487 million was spent with minority suppliers in 2022, including $276 million spent with Black suppliers and $250 million in specialty finance approved to support CDFIs to make loans in communities of color and developers of color.
Castaneda said there are many other funding opportunities, such as connecting small businesses with non-financial partners to get minority business help with business certifications, and tap grants they may not know exist.
Initially, he said they get a lot of questions when working with new businesses.
“We want them to know that we understand where they’re coming from and to show them that we’re here to help them reach their business goals. One of the best ways of doing that is by getting out into the community,” he said.
Currently, they are teaming up with locally sourced community-based organizations, known and trusted, and collaborating to reach out to help local business owners with an end goal of a long-term approach to close the wealth gap for underserved communities, including communities of color. They have formed productive relationships with Community Development Financial Institutions, along with women, veteran, and minority-business resource centers that have access to resources to help the businesses.
“When you combine their work with the products and services we’re offering, you have a robust network of financial resources to help small business owners grow and thrive,” he said.
Even as home interest rates bump up to over 7%, he is optimistic that US Bank programs can help close the wealth gap in communities of color.
“Homeownership is a cornerstone of wealth building – and Black and Hispanic families disproportionately rent their homes, while being underrepresented in the mortgage industry,” he said. “These factors contribute to a comparatively low homeownership rate among Black and Hispanic families.”
Access Home initiative, introduced in 2022, allows borrowers to get up to $12,500 in down payment assistance and a $5,000 lender credit that can be used toward closing costs, including the ability to buy down mortgage interest rates.
Through their Access Home Loan program, he said they have also committed $100 million, which is available to qualified buyers in markets nationwide with loans available for several majority-minority census tracts.
And, they are now hiring new-to-industry mortgage loan officers to help service underserved communities of color, including Black and bilingual Hispanic communities.
He said the program includes a full year of technical and community outreach training for loan officers in partnership with housing agencies, community leaders and minority realtor trade organizations.
Although they do not provide grants directly, he said they are looking to collaborate with organizations with access to grants and programs that benefit women, veteran, and minority-owned businesses.
“We work with business resource centers that specialize in working with specific groups on financial education, business coaching, business certifications and a host of other services. Most of these groups receive government funding that allows them to provide these services at no cost to the client,” he said.
For more information, see https://www.usbank.com/splash/multicultural/access.html