Symone is the Digital Engagement Manager for Beneficial State Foundation based in Oakland, CA.
What’s the secret to securing funding for your business? If you’re an entrepreneur of color, building relationships is key – and it’s never too early to start preparing.
Earlier this month, one of Beneficial State Bank’s Vice President and Market Managers, Charlie Te, spoke at Ascent Funding’s “Breaking the Barriers to Capital” event at the Curious Comedy Theater in Portland, OR. Nearly 100 people, roughly two-thirds of whom were business owners, came out to learn how business leaders from underrepresented backgrounds can overcome barriers to securing business loans and other forms of capital.
Apply for funding early in the process of launching your business.
With few big banks making business loans under $100,000, Portland business owners find it difficult to access the capital they need. It’s well known that entrepreneurs rely on their network of friends and family for initial capital when launching a business, a perhaps easier ask for race or class privileged entrepreneurs who may have access to wealth their family members have accumulated over generations. Entrepreneurs from underrepresented backgrounds, however, not only often lack access to this “friends and family” funding, but they are also often responsible for supporting their families financially.
To overcome these challenges, panelists suggested entrepreneurs seek funding from alternative organizations –and apply early in the process of launching their business.
Pitch competitions such as Portland State University’s annual Elevating Impact Summit Pitch Fest and PitchBlack PDX are great ways for entrepreneurs of color to secure funding in the form of grants (that don’t need to be repaid). Micro Enterprise Services of Oregon (MESO) and Opportunity Fund offer loans for small business owners.
Build a relationship with a banker to make the process less intimidating.
Critically, panelists also suggested building a relationship with a banker to make the process less intimidating–a practice with which community bankers are already familiar. Charlie Te agreed that this is a good tactic for securing a loan: “Start off early. Whoever you bank with, it’s good to have that history because once you apply for a loan, [the bank] will say okay, this person has been with us for a while and they haven’t overdrawn. They have good finances. It’s good to have that.”
Robin Wang, Executive Director at Ascent Funding, summed up another key takeaway from the event: Preparation is key.
“A lot of business owners are not aware of what it takes to properly prepare…It’s essential to have the right reports, the business health must be in the right condition, and owners must be knowledgeable and confident about their plans for deploying their desire capital. Without putting that preparation in, people will not get the capital they are looking for.”
Preparation is key: be aware of what it takes to properly prepare when applying for funding.
Ascent Funding offers a variety of resources to help small business owners from underrepresented background prepare for the loan application process, including seminars, workshops and office hours for business owners to receive personalized advice about their capital needs.
The financing challenges that entrepreneurs of color face cannot be overstated. Thanks to Ascent Funding for providing the space and tools needed to encourage investment into underrepresented business owners.
Click here to watch videos of the panel sessions from this event.
This blog post reflects the author’s personal views and opinions, and does not represent the views and opinions of Beneficial State Bank and/or Beneficial State Foundation.