Creativity helps black-owned and minority-owned businesses find success

By Roddell McCullough

Opportunities are on the rise for Black-owned and minority-owned businesses to secure the capital they need for business success, but there is still more that we as a community can do to lift this important sector of our economy.

Many Black-owned and minority-owned businesses have been undercapitalized, making it more difficult for them to qualify for traditional bank financing. Banks can be part of the solution, however, by working creatively with community partners to provide access to “patient” capital, giving entrepreneurs the critical time they need to build their businesses successfully.

Speaking with community leaders in my role with Cincinnati-based First Financial Bank, I often hear about how improving access to capital for these businesses can spark a cascading effect that will ultimately improve the neighborhoods in our region. On this front, we are fortunate that several initiatives are underway and showing great promise.

The Minority Business Accelerator (MBA) is a leading example. As a flagship economic development initiative of the Cincinnati USA Regional Chamber, its focus is on accelerating the development of the entrepreneurial ecosystem for the minority business community. First Financial Bank pledged $1 million to support the Accelerator’s work in growing larger-scale minority-owned businesses, while also helping MBA member organizations access funding from the U.S. Small Business Administration. The Accelerator gives support and coaching to help minority-owned companies acquire the resources they need to excel, with a goal of helping those companies generate $2 billion in sales and 3,500 jobs over a five-year period.

The Local Initiatives Support Corporation (LISC) is doing outstanding work here to invest in small businesses, prepare people for living wage jobs and drive community engagement for economic development. First Financial has provided a $3 million loan to LISC for minority small business development.

In many cases, lending strategies do not even have to include large loans to make a big impact. First Financial is providing microloans through the MORTAR entrepreneurship hub and the Greater Cincinnati Microenterprise Initiative. Our support has also led to microgrants through the Collective Empowerment Group and the PUSH Grant fund, to help smaller Black-owned companies survive and grow. The Collective Empowerment Group is making micro grants to help 30 small Hamilton County businesses succeed. Similarly, PUSH Grants help Black-owned and minority-owned businesses by providing up to $5,000 so they can stay open through 2020.

Sourcing is another area where Black-owned and minority-owned businesses can find success. Many large organizations set internal goals for providing business opportunities to diverse vendors. First Financial consistently exceeds our goal of 10 percent of sourceable vendor spending with diverse suppliers, and we are always searching to add new relationships.

With our headquarters in Cincinnati, First Financial eagerly embraces our leadership role in fostering success among these entrepreneurial organizations. This is exemplified by our 2018 commitment to lend and spend a total of $1.7 billion over five years with minority consumers and businesses. This support will include the addition of eight new banking centers located in low-to-moderate income communities, such as our new banking center in Walnut Hills. Providing access to banking services with brick-and-mortar locations can be a necessary first step to support business in these communities.

Such access, plus a determination to lending and investing in our communities, are all important, and in fact these are core aspects of the strategy at my bank to offer financial resources that make lives better. Ultimately, though, we need to go even further to help drive the dramatic growth our community wants to see among Black-owned and minority-owned businesses.

Maintaining a focus on providing inclusion for all in a recovering economy will need to underscore everything we do as a community. Inclusion is key to good business, and maximizing potential in the economy will be possible when everyone is given an equal chance to participate.

Roddell McCullough is the Director of Community Development at First Financial Bank.

First Financial Bank is a Goering Center corporate partner, and the Goering Center is sharing this content as part of its monthly newsletter, which features corporate partner articles.