Why Should White Guys Have All The M&A Fun? Why More Black Businesses Should Consider Mergers & Acquisitions
Category: Black Business,Economic Empowerment,Minority Business,Small Business Author: BCDAlliance Date: 3 months ago Comments: 0

Reginald F. Lewis was one of the richest African-American men in the 1980s, and the first African American to build a billion-dollar company.

His bestselling book, “Why Should White Guys Have All The Fun?“, is one of my favorites. A small portion of the book briefly describes a conversation Lewis had with another Black attorney.

During this conversation, he expressed his desire to see more African Americans involved in mergers and acquisitions as a business and wealth creation strategy. This sparked my personal interest in M&A and led me to connect with Cedric Powel.

Cedric is an M&A Attorney who represents private and public companies, investment banks, and private equity firms in corporate and transactional matters, including mergers and acquisitions and joint ventures.

What are some of the potential benefits that M&A transactions may offer Black businesses (in particular small businesses)?

M&A can be an efficient way for small businesses, including Black-owned businesses, to increase their market share and their ability to compete with their larger organizations within the same industry.  Consolidation within a particular industry is a common tool used to capitalize on synergies across organizations and to grow businesses faster than may be possible organically.  The same is true for Black-owned businesses.

At what stage should a business owner consider an M&A transaction as part of their strategic plan?

M&A, either as part of a business’ growth strategy or as part of its owner’s exit strategy should be considered at founding or as soon as possible thereafter.  Basically, it’s never too early to start thinking about potential investment transactions—whether it be a growth equity fund raise, the acquisition of another business or business line, or a liquidity event for the founder/owner.  In my opinion, the potential benefits of an M&A transaction should always be a consideration as part of a business’ strategic plan.

What are some best practices for business owners who may be considering an M&A transaction to increase the likelihood of a successful transaction and integration process?

My main recommendation is to engage competent advisors—financial and legal—early.  M&A is as much an industry as it is a process.  And, like every other industry, there are qualified and sophisticated practitioner—financial, legal and otherwise—who focus on identifying, leading, and consummating M&A transactions on a daily basis.

Any business owner who is considering a potential M&A transaction should start, at minimum, by discussing the process with a financial advisor and a legal advisor to set expectations and better understand the potential pros and cons.

As part of your work representing private equity funds and strategic acquirers, what would you say makes a business/company most attractive for a growth investment or acquisition?

Institutional investors and strategic acquirers usually focus on the income generating history of the particular business, its scalability, and how that business fits the specific investor’s investment strategy.  There is no one size fits all answer here, but building a strong customer pipeline with recurring revenue and great margins is always a positive.

However, often customer profiles and concentration are industry specific, so it is important to discuss your specific business, the universe of potential investors, and the current M&A trends with a specialized financial advisor to get a better understanding for where your particular business fits in the industry landscape.

In addition to the financial condition of the business, corporate hygiene and record keeping are key.  It is important to be able to deliver complete and accurate records with respect to the business’ current and historical operations as part of any investment due diligence process.  Lack of appropriate record keeping can sour an investor’s outlook on an otherwise great business.

How one Dayton entrepreneur is reinvesting in the Black community
Category: Black Business,Community,Entrepreneur Author: BCDAlliance Date: 5 months ago Comments: 0

DAYTON, OHIO (Dayton Business Journal) — Nate Dillard has a simple explanation for his entrepreneurship journey: He followed in his father’s footsteps.

“When my dad left the military, he started his own IT business,” Dillard said. “That’s why I followed that legacy. My dad did it. I saw it happen. So, I did what I saw — and I’ve done it in my own way.”

As a young man growing up in Detroit, Dillard witnessed firsthand the powers of generational wealth and community reinvestment. But for many minority business owners, securing enough capital to turn growth-stage ventures into self-sustaining enterprises remains a challenge, he said.

That’s why after serving eight years active duty for the U.S. Air Force, Dillard joined the reserves and launched the National Black Business Directory (NBBD) — a business development platform designed to empower Black entrepreneurs.

Its primary goal is to help minority business owners leverage the best available resources to maximize access to capital.

Late last year, NBBD teamed up with two other Black-owned consulting companies — AgencyX and Intensify Design — to launch a new venture: LunarX Agency, a full-service design and development consulting firm featuring a team of more than 20 independent contractors and strategic outsourcing partnerships.


Category: Black Business,Black-Owned Businesses Author: BCDAlliance Date: 5 months ago Comments: 0

Operation Hope, one of the leading financial education and economic empowerment groups serving African Americans, teamed up with global e-commerce powerhouse Shopify to create 1 million Black-owned businesses over the next five years.

John Hope Bryant, the organization’s president and CEO, announced today the HOPE One Million New Black Business & New Black Entrepreneurship Initiative (1MBB) and its goal to develop multitudes of new Black-owned firms throughout the nation in the U.S. by 2030. To achieve this bold mission, Operation HOPE will work closely with Canada’s largest publicly-traded company which estimates the value of its commitment at $130 million over the course of this initiative.

Operation HOPE has also quantified its portion as worth tens of millions of dollars and will secure other partners who will make significant in-kind contributions. In fact,  100 Black Men of America Inc., the country’s top African American-led mentoring organization chaired by influential businessman and civic leader Thomas W. Dortch, Jr., helped initiate the effort as a key founding community partner. In that role, the organization has pledged to supply 1MMB with business mentors nationwide.

“Creating generational wealth through the creation of new Black businesses and Black entrepreneurs is a direct gateway to social justice. The creation of ownership, jobs, and opportunity in a generation helps to strengthen democracy and ensure freedom through self-determination. This is empowerment at scale,” Bryant said in a release. “To have Shopify actively supporting the 1MBB Initiative is a true game changer. Working together, we can scale our business creation platform to help underserved communities and enhance economic prosperity across America.”

“At Shopify, we believe more independent voices make commerce better for everyone. That’s why we work to break down the barriers to entrepreneurship every day,” Shopify President Harley Finkelstein said in a release. “By collaborating with Operation HOPE and working together on our shared passion for helping underserved communities succeed, we believe we can help unlock even more economic opportunities for Black business owners across the country, leading to greater choices for shoppers everywhere.”

Historically, the Black community has faced systemic barriers to entry. Moreover, COVID-19 has further served as an anathema to Black businesses. Operation HOPE reports “that 58% of Black firms were considered at risk or distressed as well as suffering from low profits, low credit scores, or income shocks in the months immediately following the onset of the pandemic And according to the National Bureau of Economic Research, more than 40% of such firms have been forced to close their doors.

Partnered with Shopify, Operation HOPE seeks to address these challenges by reducing impediments, encouraging more entrepreneurs to start and scale businesses and offer business-building tools, resources, and education.

According to Operation Hope, the program has launched its website and will provide guidance for those seeking to participate including :

  • The 1MBB initiative is open to any Black entrepreneur or small business owner who has a dream of starting a business or taking their existing business to the next level.
  • Each entrepreneur will create his/her unique path, depending on their work experience, how far along they are in their business plan and their specific areas of need. There is also a program for those with no experience, just the passion and drive to build a business, by utilizing the HOPE Business in a Box (HBIAB) online training program for those starting at square one. This program consists of a variety of self-paced learning modules and can be completed in as little as 10 weeks.
  • 1MMB provides a wide range of services including creating or modifying a business plan; providing 1:1 small business coaching; getting advice from experts in a variety of areas.

It will also help entrepreneurs launch their operations either in a physical location and/or through an e-commerce platform; and provide guidance on ways to attract funding and customer development/retention.

To learn more about this initiative, visit www.HOPE1MBB.com. Organizations looking to work with Operation HOPE and Shopify to advance our mission to help more Black businesses build the future of commerce are encouraged to fill out a form through www.HOPE1MBB.com.


Difference Maker: Boosting Black Business
Category: Black-Owned Businesses,Funding,Investment,Local Author: BCDAlliance Date: 5 months ago Comments: 0

Evanston Police Officer Tosha Wilson had a steady job and a good credit score but could not get a startup loan for her proposed Black-owned business.

This brought about an epiphany: “There is no way that we’re the only people in this situation.”

So, she started helping small Black-owned businesses raise money via a Facebook Group called Boosting Black Business, which chooses a new local business every month to fund.

Wilson asks members to commit to donating $20 a month.

First there was, Chi Fresh, a West Side food co-op, which received $22,000, Wilson said.

In August, the group raised a similar amount for the business she and her partner created: The Laundry Café.

“You come there and you kind of just reinvent yourself while doing laundry,” she said. “I mean, it seems so weird but it’s something we have to do every day, and you spend an average of two hours in the laundromat. Why not find something to get into that heals the soul? I think as a country we need a whole lot of healing.”

This month’s business is Rose Café, an effort by elementary school teachers who are trying to open a book store in Chicago’s Roseland neighborhood.


Black-owned businesses should adapt to ecommerce, says Katika’s founder
Category: Black-Owned Businesses,Ecommerce Author: BCDAlliance Date: 5 months ago Comments: 0

Jason Coles shares his tips on how Black-owned businesses can thrive during the COVID-19 pandemic by using digital tools.

Ecommerce has seen rocket ship-like growth since the start of the COVID-19 pandemic, when brick-and-mortar shops closed and consumers shifted to buying goods online.

Meanwhile, COVID-19 has decimated Black-owned businesses on the whole: Over 40% went inactive during the first few months of the pandemic, double the rate of white-owned businesses.

Jason Coles wants to reverse the latter trend, and thinks ecommerce is one way to do it. His company, Katika, is a platform that helps people find products and services from Black-owned businesses locally and internationally with an office in Johannesburg, South Africa.

For the founder and CEO’s Philly Tech Week 2020 presented by Comcast event “Black Business E-Adoption During COVID-19,” Coles shared ways Black-owned businesses can establish themselves online and better participate in ecommerce. (Note that some of his tips could also be used by business owners of other backgrounds who are interested in ecommerce.)

Incorporate your business online.

A factor contributing to Black-owned businesses’ disproportionate decline during the pandemic is that government loans only made it to a disproportionate percentage of them. Many of those businesses missed out on accessing that capital because they didn’t have the right infrastructure to appease the loan-making powers that be. And sole proprietors — which make up 95% of Black-owned businesses — weren’t eligible for PPP funding at first; they became eligible only after the first round passed. (Don’t discount systemic racism, too.)

“The most important thing for applying for [Paycheck Protection Program] loans was having proper infrastructure,” said Coles, whose Katika was recently accepted into Philly Startup Leaders’ second Founded In Philly accelerator.

Coles said doing things like incorporating your business and establishing your employer identification number can help — and can now be done online with sites like RocketLawyer, which he prefers to use over competitors because it’s Black owned.

“Traditionally, these things would be done by paper. Now everything is electronic. You can do all of these things online,” he said.

Online tools can help make branding easier.

Coles recommends building your brand identity with logos and graphics. Fiverr and Upwork can help you connect with freelancers and Canva can help you create your own graphics.

Social media is a tool to better understand your audience.

Using social media and creating customer profiles to reflect your audience can help business owners better reach their customers.

“Look at your product and who your audience is, and that’s how you will understand what social media platforms you will use,” Coles said. “Who’s my audience? What do they buy? When do they shop?”

Your packaging is a key part of how you connect with customers.

“Product, messaging and packaging are important,” he said. “When people open a package, they should receive some kind of message” about who you are and what your company stands for.

Online retailers can help with the shipping process.

Coles recommends using sites like StickermuleAlibaba and Rollo to buy products like labels to support your shipping process.

Black-owned businesses should adapt to ecommerce, says Katika’s founder

Virus, strife prompt ‘resiliency’ funds in Black communities
Category: Uncategorized Author: BCDAlliance Date: 5 months ago Comments: 0

SAN FRANCISCO — The modest cash grant Iguehi James received from the Oakland African American Chamber of Commerce helped the clothing designer defray costs, including surge prices on elastic and fabric that jumped dramatically due to the pandemic.

The application process was simple and she qualified for a $5,000 “resiliency” grant, despite being a solo practitioner with no employees or storefront.

Along with the fiscal help, the grant reminded the 38-year-old novice entrepreneur that she is part of a community with a tradition of mobilizing to help members in times of distress.

“We’ve been denied opportunities, we’ve had to work really hard to get to where we are,” said James, who lives in Oakland, California. “When you have other people who know the struggle, know the plight, know how hard it is to be valued … to be seen, you just feel like you have a community.”

The chamber announced this summer that it had raised $1 million for its fund to help Black-owned businesses. It’s one of several launched in the U.S. since the pandemic began closing businesses and schools, and it’s a nod to the difficulty that Black businesses have in landing bank loans and the disproportionate impact the virus has on African American families.

Elsewhere, female Black civic leaders in Washington state unveiled the Black Future Co-op Fund in June to address damage created by systemic racism. The Black Resilience in Colorado Fund aims to help people in the Denver area.

Perhaps the most astonishing grass-roots effort has been in Portland, Oregon, where organizers have raised more than $1.7 million for Black residents of the city that has been in the national spotlight for its nightly protests against police brutality. The Black Resilience Fund has helped nearly 3,000 residents with groceries, utility bills, student loans and rent, according to its GoFundMe page.

Cathy Adams, an event planner and president and CEO of the Oakland African American Chamber of Commerce, said discussions about its fund began in late April as small businesses struggled to get help from the federal government’s paycheck protection program. Phone calls from hurting business owners broke Adams’ heart.

Meanwhile, the police killing of George Floyd in Minneapolis in May further underscored the inequities faced by African Americans in work, wealth and health.

“This resiliency fund? This is nothing but love,” Adams said.

Aaron Bryant, a curator with the National Museum of African American History and Culture in Washington, D.C., says the funds are reminiscent of the benevolent societies that began appearing in New Orleans and Philadelphia in the late 1700s to aid Black people in times of illness, death and other hardships.

“What we see happening now is really important because it shows the humanity, that we still have humanity in spite of all the obstacles that we’re confronting,” he said.

Shawn Ginwright, an education professor in the Africana Studies Department at San Francisco State University, says the funds highlight the discriminatory policies that have shut out Black people from acquiring capital and wealth.

“The real story is not the resilience,” he said. “The real story is why is resilience necessary in the first place.”

In Oakland, Adams approached television stations to generate news coverage about the fund and spent hours on the phone pitching it until her voice grew hoarse. She worried the chamber might not meet its goal, but eventually Adams landed donations from more than 200 companies and individuals, including $200,000 from Clorox and $100,000 each from Blue Shield of California, Kaiser Permanente and online security company Okta

“Several people called me crazy, but I don’t think what they said was personal,” she said. “I just think they did not believe in miracles.”

The chamber expects to award grants to some 150 businesses ranging from $2,500 to $10,000. Only chamber members can apply and recipients must complete a financial management seminar. Grants have been used for marketing, equipment and even a new restaurant location.

James, the designer, beefed up online marketing for her “Love Iguehi” line of colorful masks, head wraps, kaftans and clutches. The business had depended heavily on in-person pop-up events and conferences that have been canceled due to the virus.

The Red Door, a catering company, used its $10,000 grant to help retain seven of its roughly 20 full-time employees and has pivoted to mail-order snacks, pop-up meal events and meal deliveries.

“It’s really about hope, about extending hope,” said founder Reign Free of the grant program. “Once you lose hope, that’s it, you’re done for. They should have named it the Hope project.”



Black Organizations Fight Systemic Racism by Supporting Black Businesses
Category: Black-Owned Businesses,Funding Author: BCDAlliance Date: 5 months ago Comments: 0

Back in April, when the pandemic initially stalled business operations, reports came out that nearly 90 percent of businesses owned by people of color would not receive funding from the Small Business Administration’s Paycheck Protection Program (PPP).

So some regional organizations, such as the Oakland African-American Chamber of Commerce (OAACC), have stepped in to create resiliency funds for Black-owned businesses, CBS SF Bay Area news reported on September 28.  

OAACC reportedly began discussing how it could help small businesses in April and had raised $1 million to support Black-owned businesses by the summer, thanks to donations from more than 200 companies and individuals. According to CBS, Clorox gave $200,000 and Blue Shield of California, Kaiser Permanente and online security company Okta each gave $100,000. The fundraising for Oakland’s Black-owned businesses will continue, with about 150 additional businesses expected to receive grants ranging from $2,500 to $10,000.

The need to find resources for one’s own community is not new, which is why the federal government passed the Community Reinvestment Act of 1977 to fight racial discrimination in lending.

“What we see happening now is really important because it shows the humanity, that we still have humanity in spite of all the obstacles that we’re confronting,” Aaron Bryant, curator with the National Museum of African American History and Culture in Washington, D.C., told CBS.

And OAACC isn’t alone, as other coalitions have formed across the country to do what the federal government hasn’t. In Seattle, for example, mobilized by the May 28 death of George Floyd, four Black women launched the Black Future Co-op Fund “to acknowledge the harm that systemic racism has done to the Black community in our state,” according to its website. The Black Resilience in Colorado Fund (BRIC), which also launched in June, aims to address systemic racism against Denver’s Black residents and support Black nonprofits. Portland’s emergency Black Resilience Fund (BRF) raised more than $1.7 million by September 17 to support 3,200 Black Portlanders, according to its website.



Accenture Launches Black Founders Development Program to Support Black Entrepreneurs
Category: Black Business,Entrepreneur,Minority Business Author: BCDAlliance Date: 6 months ago Comments: 0

Accenture (NYSE: ACN) has launched the Black Founders Development Program, a new initiative that will invest in and support Black technology startup founders and entrepreneurs. Led by Accenture Ventures, the program will seek to help Black business owners and leaders advance and grow their technology businesses through greater, more direct access to venture capital, corporate mentorship and strategic connections with Accenture business partners and clients.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20200910005220/en/

Accenture launches Black Founders Development Program

As part of the new program, Accenture Ventures is establishing the Black Founders Development Fund. The fund will make strategic investments in early-stage, Black-founded and -run software startups and other market development initiatives, applying Accenture’s vast technology, innovation and investment expertise, and powerful network of technology ecosystem partners. To help Black entrepreneurs achieve their goals and make a meaningful impact, the commitment of investment funds and a strong mentoring effort will be commensurate with Accenture Ventures’ approach with its most strategic funds. The fund will have an initial focus on North America, with plans to expand globally at a later date.

“Our Black Founders Development Program will help drive economic inclusion and create new advancement opportunities for Black business owners and leaders by bringing to bear the full power of our global technology business and extensive relationships with clients, partners and the venture capital community,” said Kathryn Ross, global Open Innovation lead and the Black Founders Development Program lead for Accenture Ventures. “Leadership, resources, technology and investment knowledge are all areas where Accenture can deliver significant support to Black entrepreneurs, helping them to accelerate innovation and further grow their businesses.”

According to a study by RateMyInvestor and VC Diversity, Black founders of companies receive less than 1% of all venture capital funding, which in the U.S. alone, totaled approximately $130 billion. Similarly, a Kauffman Foundation analysis of U.S. Census Bureau data found that 28% of Black entrepreneurs’ profits were limited by lack of access to capital, compared to just 10% of white entrepreneurs.

“Black entrepreneurs continue to innovate, but face bias and lack access to capital and opportunity in the venture capital community, receiving a disproportionately small amount of funding,” said Paul Daugherty, group chief executive – Technology and chief technology officer at Accenture. “Big change is clearly needed, and Accenture Ventures will help lead that change.”

To help guide its future investment strategy, Accenture Ventures has established a Black Founders Development Advisory Council made up of diverse, established business leaders and partners to help guide and mentor Black founders and CEOs. The first two council members appointed are Kay Koplovitz, founder of USA Networks and the current chairman and co-founder of Springboard Enterprises, a community of nearly 800 women founders and leaders of emerging growth companies spanning the globe and across all industries; and Corey E. Thomas, chairman and CEO of Rapid7, Inc. (Nasdaq: RPD), a leading provider of security analytics and automation, who previously served on the U.S. Commerce Department’s Digital Economy Board of Advisors.

“We intend to play a meaningful role in creating the next generation of Black technology startups, and the demonstrated business leaders on our Black Founders Development Advisory Council are equally committed to sharing their experiences, insights and connections to help Black founders achieve their business objectives,” explains Ross. Accenture Ventures plans to announce additional advisory council members and its first participating founders in the coming months.

The Black Founders Development Program is part of Accenture’s broader effort to fight racism. On September 1, 2020, Accenture CEO Julie Sweet announced that by 2025 the company would increase the representation of African American and Black people in the organization from 9% to 12%; and increase the number of African American and Black managing directors from 2.8% to 4.4%. Other recent company actions include Ms. Sweet’s role as co-chair of the new 27-member New York Jobs CEO Council, a non-profit coalition of CEOs from leading companies that have pledged to hire 100,000 low-income New Yorkers from under-served communities over the next decade.

Launched in 2015, Accenture Ventures makes targeted equity investments in emerging technology startups, matching their capabilities with the business needs and priorities of Accenture’s clients. Its Open Innovation arm acts as a bridge to the global innovation ecosystem by bringing Accenture’s clients together with best-in-class, enterprise-relevant startups to unlock their growth potential and accelerate digital transformation.


Brooklyn’s Black-Owned Small Businesses Grow Despite Challenges
Category: Black Business,Black-Owned Businesses,Brooklyn,Minority Business,Woman-Owned Author: BCDAlliance Date: 6 months ago Comments: 0

Although the pandemic threatens those gains, many entrepreneurs are pushing on and getting creative to weather the storm

“My business is crippled right now,” Kim Morrison told BK Reader. However, it would be a mistake to count her out.

Morrison, the owner of Unique Weddings & Tours, has weathered many storms since launching her company in 2012. The COVID-19 pandemic is the latest obstacle she’s navigating to enable her Prospect–Lefferts Garden travel and events business to thrive.

It’s that type of determination that has helped a number of Black-owned businesses across the borough to expand.

Brooklyn’s Black-owned businesses expand in the face of obstacles

Minority-owned businesses in New York City grew 7.4 percent between 2012 to 2017, according to a recent report by independent think tank Center for an Urban Future.

During that time, the citywide number of Hispanic-owned businesses decreased by 8.7 percent. However, Asian-owned businesses grew by 14 percent, and Black-owned businesses increased at nearly four times the rate of white-owned business.

In Brooklyn, the number of Black-owned businesses surged 16.6 percent during the five years, making Brooklyn the county with the fifth largest number of Black-owned businesses nationwide. Still, Black businesses represent just 3.5 percent of all firms across the city — an indication of the obstacles to success they face.

“It’s very hard for entrepreneurs to survive, not only now with the pandemic, but also before,” Morrison said, adding that many Black entrepreneurs in her network shared that experience.

A significant part of the challenge could be summed by this: A lack of access to capital.

Most Black-owned businesses start at a significant financial disadvantage compared to white-owned businesses, according to The New York Times. Black entrepreneurs launch their businesses with far less capital and typically struggle over the years to stay afloat financially. Banks and other financial institutions tend to view Black and minority entrepreneurs as less credit worthy. Consequently, Black entrepreneurs often rely more heavily on family and friends to fund and sustain their business.

“I appreciate good friends who can help when my business is financially in need,” Morrison said. “They believe in me and helped me believe in myself. That’s why I survived — not because of bank loans.”

Will the pandemic wipe those gains?

Despite the tenacity of many minority-business owners, the COVID-19 pandemic threatens the gains. Between February and April, Black-owned businesses declined nationwide by 41 percent during the lockdown, according to a Federal Reserve Bank of New York analysis.

The Reserve Bank blamed much of the high attrition rate on the lack of relationships between Black entrepreneurs and financial institutions.

Back in January, Morrison expected 2020 to be a turning point toward solidifying her success until COVID-19 came along and wiped out about 80 percent of her travel business. Her plan B is to launch a customized gift baskets business in October. That will help to keep her business afloat until tourism and events markets bounce back in 2021.

Like Morrison, Nadia Aristide anticipated 2020 would be a breakthrough year for her business and finance consulting firm, Maroon Strategist. She had several contracts on the table before they evaporated with the pandemic, as many of her clients faced an uncertain future.

“I found opportunity in the middle of chaos,” Aristide, Maroon’s president and CFO, said. Aristide has been in business for nearly five years, with an office at Brooklyn Commons co-working space.

Instead of sinking into despair, she studied information from the Small Business Administration on how small businesses could stay afloat during the economic crisis, as well as the loan and grant programs that became available. She soon found herself teaching webinars and helping entrepreneurs who were unaware of the federal lifelines.

How to survive the hard economic times

In these difficult times, Aristide advises her small business clients to know their income and expenditures.

“You need to understand your cash flow and financials, revenue and operating expenses. It’s not just how much money you are making each month. It’s also how much you are spending,” she tells her clients, many of whom are minority-business owners.

She noted that if they wanted to apply for government financial assistance, such as the Paycheck Protection Program (PPP), financial institutions typically require detailed cash flow information.

Aristide has been pleasantly surprised to receive a sudden influx of people who want to start a small business or a nonprofit. Many of them were independent contractors who had no business entity. Consequently, they had no business banking accounts and couldn’t apply for government coronavirus relief funding.

“There is a lack of knowledge in our community. A lot of entrepreneurs who had side hustles had to wake up,” she said.

Where to Find Black-Owned Banks and How You Can Support Them
Category: Black Business,Community Author: BCDAlliance Date: 6 months ago Comments: 0

Since 1865, when President Abraham Lincoln established the Freedman’s Bank, this country has grappled with providing financial access to millions of disenfranchised Americans. Into the void steps a small but influential group of Black-owned banks.

Black-owned does not mean “Black only”

According to Kevin Cohee, Chairman and CEO of OneUnited Bank, the largest Black-owned bank in the U.S., Black-owned banks are designed to meet the financial needs of underserved communities. However, people of all races are welcome to take advantage of their unique services. For customers, it is a win/win situation.

Black-owned banks like OneUnited help create infrastructure and add value to the inner-city areas in which they are located. They also help customers build (or rebuild) their financial reputations and foster a greater sense of community pride. One of the most important goals of Black-owned banks is to help customers become financially literate and provide them with the tools they need to learn how to make money work for them.

Since May 25, 2020 — the day a Minneapolis police officer knelt on 46-year-old George Floyd’s neck for nearly eight minutes until Floyd was dead — OneUnited Bank has opened 60,000 new accounts. Looking for a way to support the communities that need it most, Americans of all races are doing what they can.

How to become an ally of a Black-owned bank

Like all financial issues, what you do with your hard-earned money deserves careful consideration. Here are some of the benefits to opening an account, making an investment, or taking out a loan with a Black-owned bank:

  • If you already have an established bank account, opening another is a good way to diversify funds. As Cohee says, “Banks are not like wives. You can have more than one.”
  • Having more than one checking account is an easy way to keep track of your money. For example, if you make online purchases using one account, it’s simple to track how much you are spending without wading through all your other purchases.
  • Building an emergency savings account with a second institution is a clever way to train yourself to keep your hands off until the funds are needed.
  • Even today, banking relationships are important. Establishing a working relationship with more than one bank offers more options when it comes time to make a big financial decision.
  • You can feel good about helping to build at-risk communities and being part of something bigger than yourself.

If you decide to become an ally, take a look at this map designed by Blackout Coalition, showing the Black-owned banks and credit unions around the country. Do some research, decide which products and services best suit your needs, and become part of the movement.

The heart of the community

It might be easy to imagine OneUnited Bank’s Cohee as a rich, self-satisfied fat-cat. He has an MBA from the University of Wisconsin, a law degree from Harvard, and success as an investment banker and business owner under his belt. Cohee is indeed a wealthy man, but it was never his ambition to make money for the sake of hoarding. “I was determined to make money quickly so I could switch from being focused on what I was earning to making Black America a place where there was more opportunity.”

To understand Cohee’s goal to start a Black-owned bank, it helps to know where the sentiment was born. He was four years old, sitting in an uncle’s basement in Kansas City, Missouri, surrounded by a room full of Black Power supporters discussing how to improve the lives of their family, friends, and neighbors. He recalls one gentleman turning to him and gently telling him that there were enough good men on the street, fighting to effect change. What the movement needed were young brothers to go out, get a good education, and work within the system to give others a hand up. What the gentleman hoped to see were more Black-owned businesses, Black-owned banks, and Black Americans in a position to help others.

Today, from one of his offices in Compton, California, that is precisely what Cohee and his staff are busy doing. They help customers who are unable to open bank accounts due to past financial problems rebuild their good names and rebuild credit. They loan money so customers can purchase homes and open businesses in low- and moderate-income areas. They provide financial education through an ever-expanding library of entertaining, informative materials. They stay on top of new technology, believing that 21st-century banking will be done almost entirely online.

More than anything else, though, they make their presence known, becoming a permanent anchor around which communities can build.

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