(ABC News) Small minority-owned businesses have often struggled to gain access to capital and other tools to grow, a challenge made more daunting by the economic upheaval of the coronavirus pandemic. But a new effort announced Tuesday aims to address those disparities in pockets of the nation long gripped by poverty.
Hope Enterprise Corporation, which runs a Jackson, Mississippi-based credit union that specializes in lending and other financial services to underserved communities, is partnering with seven cities and nine historically Black colleges and universities to launch the “Deep South Economic Mobility Collaborative.” Goldman Sachs 10,000 Small Businesses initiative is providing up to $130 million to the endeavor, which will be available to clients in Louisiana, Mississippi, Alabama, Arkansas and Tennessee.
It’s estimated that well over 100,000 small U.S. businesses have failed since the COVID-19 pandemic began, with underserved communities struck especially hard. Many struggling companies were unable to get loans, including newly formed businesses and those whose financial records didn’t meet bank requirements.
“We’ve seen businesses close in record numbers, particularly small businesses, mom and pop businesses, those owned by people of color,” said Bill Bynum, CEO of Hope Enterprise Corporation, speaking exclusively to The Associated Press ahead of the launch. “We think right now the resources that we have and the partnerships that we can bring to bear with cities and with anchor institutions like HBCUs is needed now more than ever.”
The collaborative is something like a “one-stop shop for business support,” said Bynum.
Participating small business owners can access capital provided by Goldman and take online classes offered through Goldman’s 10,000 Small Businesses Initiative. Other resources include small business development centers offered by some HBCUs, and procurement and contracting programs in certain cities, Bynum said.
Any business owner in the five states can apply, but the program aims especially to help minority-owned businesses in a region that has struggled to address deep poverty and racial economic disparities.
Hope gave out nearly 3,000 loans in the Deep South in the first round of lending of the Paycheck Protection Program, a key federal effort to help businesses hurt by the economic closures arising from the pandemic.
Chris Johnson, owner of The Barber Club Shop LLC in a New Orleans suburb, was one of them. After spending a frustrating two hours on hold with a major bank only to get disconnected, he reached out to Hope and got a live person immediately. Read more here.