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Carolina Small Business launches loan fund for African American-owned small businesses across the state of North Carolina

October 20, 2016 / Janice Rojas / Company News, News, Small Business

After recognizing the need African American-owned small business owners have for capital, Carolina Small Business launches the African American Loan Fund designed to provide access to flexible and sustainable capital to help African-American small businesses start or grow their business.

African-American entrepreneurs are the fastest growing segment of the nation’s small business owners. African-American ownership increased 60 percent during the economic expansion from 2002 to 2007, as compared to roughly 13 percent for white-owned firms during the same period. Approximately 1.9 million, or 7 percent, of the nation’s small businesses are African-American-owned, including many of the independent shops, restaurants and service providers that create jobs and economic opportunity in underserved communities across the country.

“The African American Loan Fund plays a critical role in helping African-American entrepreneurs to face barriers in accessing capital and business services to grow or start their business. With the launch of this loan fund, we hope to help the African-American small business community to face these challenges and grow healthy, resilient small businesses,” said Lenwood V. Long, Sr., President/CEO of Carolina Small Business. “Our goal is to elevate the work that we’re doing for underserved communities by helping them to succeed and create jobs across the state.”

Despite the rise of African-American small businesses, access to capital, particularly to loans between $50,000 and $350,000, has been documented to be a major obstacle to growth.

In North Carolina, African-American businesses accounted for 4.2 percent of firms, but only 1.3 percent of receipts in 2012. Similarly, Asian American Indian, and Hispanic businesses all showed a much lower level of receipts, compared to their concentration. Areas with a higher African American population, in general, had higher percentages of African American-owned businesses. Even in regions with high representation, African-American businesses receipts remain below 3 percent.

A national survey conducted by Wells Fargo/Gallup, shed light on similarities and differences of the small business experience for Asians, Hispanics, and African Americans. The study concluded that among those reporting not being confident in being able to obtain credit, African Americans reported it was due to their credit history and tight lending requirements.

Through the African American Loan Fund, Carolina Small Business provides access to capital and business services to help African-American entrepreneurs face this challenge.

The African American Loan Fund features:
– Affordable loan terms between $25,000 and $250,000 up to 5 years
– Flexible eligibility criteria to address individual borrowers’ unique needs in the areas of collateral, credit, and a cash flow recapture option for lower upfront equity injection
– Interest rate no higher than 10% based upon risk
– Technical assistance (pre-application and post application support)

The African American Loan Fund addresses four key challenges facing the African-American small business community: credit worthiness, insufficient equity, lack of collateral, and need for business skills. Carolina Small Business offers the Carolina Small Business CARES program, a specialized program designed to provide education, coaching and assistance to businesses, tailored to address the specific challenges they face.

The purpose of this program is to assist African-American entrepreneurs in growing and sustaining their businesses. Loans will be made for sound business purposes including working capital, business acquisition, equipment, tenant improvements, debt refinance, and/or purchase of owner-occupied real estate.

To learn more about the African American Loan Fund and the services offered by Carolina Small Business, please visit www.carolinasmallbusiness.org or call 919.803.1437.