August is National Black Business Month, a time to celebrate Black-owned businesses in Minnesota. It’s also a time to shine a light on the challenges.
According to the Federal Reserve, only 26% of Black applicants are approved for a business loan as a sole proprietorship, compared to a 60% approval rate for white applicants.
“We believe entrepreneurs are the heartbeat of our communities,” said Monica Rubio, a senior vice president and community lending market executive for Old National Bank.
Rubio said providing greater access to capital for businesses that don’t normally qualify is the primary goal of Old National Bank’s Empowerment Small Business Loan Program.
“It’s kind of a best-kept secret because we still have individuals and businesses who are not aware of this program,” Rubio added.
The Empowerment Small Business Loan Program is targeted at businesses that operate within a low-to-moderate income or rural community with revenue less than $25 million. These business owners can borrow up to $5 million under expanded credit guidelines, including a lower minimum credit score and modified collateral requirements.
“The minimum credit score is 620 on this program versus a 680,” Rubio added. “Because there are credit score gaps between white borrowers and Black borrowers, Latino borrowers and white borrowers, this can help.”
Rubio said she’s seen the Empowerment Small Business Loan Program allow some, like daycare business owners, to go from a home daycare to owning their own storefront.
“When we talk about the wealth gap, it doesn’t just come in income; it comes in ownership, and we’ve been able to help small businesses own their own space,” Rubio explained.
Old National Bank also partners with nonprofit organizations for those entrepreneurs who need an extra boost. “If someone reaches out to Old National Bank for a loan and they’re not ready today, we partner with organizations that can help them get ready,” Rubio added. That includes business coaches that lay a path for a small business to succeed.
“Because when you create sustainability for a business, it impacts our communities.”
To learn more about Old National Bank and its Empowerment Small Business Loan Program, visit here.
