After the murder of George Floyd by a Minneapolis police officer in May 2020, many residents, organizations and businesses began taking a closer, deeper look at racial and economic injustice. Though many have been making contributions for a number of years, several area banks say they have expanded their investments in minority businesses and neighborhoods.
“Historically, Black communities have been shut out of the financial resources and capital that could allow communities to grow businesses, own real estate, invest locally and truly change the trajectory of their financial futures,” said Monica Mitchell, Wells Fargo Bank’s vice president of social impact and sustainability. “One of the best paths to wealth creation is business ownership, but there is a huge gap in the ability for Black entrepreneurs to secure the financial resources necessary to launch and grow successful businesses.”
Mitchell notes Minority Depository Institutions (MDIs), Community Development Financial Institutions (CDFIs) and businesses are undercapitalized, but Wells Fargo is committed to accelerating the change through equity investing in those institutions. “Equity capital investments enable minority institutions to expand lending and deposit-taking capacity in their communities,” she said. “It allows businesses to establish, grow and hire. These institutions serve as cornerstones in the communities they serve. Investing in them is a clear step to begin promoting greater economic prosperity for Black communities immediately.”
Wells Fargo has invested $50 million in African American MDIs including The Harbor Bank of Maryland and Industrial Bank. Another initiative includes collaborating with the Black Economic Alliance Foundation to launch the Black Economic Alliance Entrepreneurs Fund to accelerate the growth of Black entrepreneurs and business owners. The $50 million evergreen fund will provide seed, start-up and early stage capital to businesses founded and led by Black entrepreneurs.
“The banking system is the financial lifeblood of any community,” Mitchell said. “When a community’s banking system is ailing, the community will also suffer. By supporting more Black-owned businesses and founders, those businesses then leverage hiring more Black workers and providing even more investment in Black businesses and communities through locating their companies there, hiring other Black vendors and more. As a result, the dollar circulates in the community longer, having more of a positive effect.”
JPMorgan Chase has made a $30 billion commitment to advancing racial equity in underserved communities with several initiatives. Over the next five years, Chase plans to provide an additional 15,000 loans (up to $2 billion) to small businesses in majority Black and Latinx communities as well as spending an additional $750 million with minority suppliers.
Two years ago, Chase invested $3.65 million toward minority business development in Baltimore and Washington, D.C., through the Entrepreneurs of Color Fund which provides low cost loans and technical assistance to minority small business owners.
The banking institution has also set up a new program in 13 cities across the United States, including the D.C./Baltimore area, where senior business consultants mentor and support participants by helping them to understand the intricacies of operational effectiveness, access to capital, cash flow and finding a network of advisers.
“We have a plan that we use to work with those small business owners to really help them with understanding how to do business and really work with strategic objectives — even helping them get certified as minority-owned businesses so they can qualify for certain corporate contracts and government contracts that look into helping minority-owned businesses,” said Sean Ramsaywak, who was recently made the lead of Chase’s Business Banking Division designed to accelerate minority small business growth.
“This team of senior business consultants is really having an impact on these minority entrepreneurs,” Ramsaywak said. “We are already seeing it. We are having a lot of positive feedback from these business owners. We have literally helped hundreds of business owners around the country with managing their business. What we also see is the impact on the community is so positive.”
Detra Miller, the head of M&T Bank’s minority- and women-owned business banking team in Baltimore, believes it is vital for the banking institution to reflect its community, especially in the Baltimore area which is a minority majority city.
“It is really important to us to make sure we are really inclusive and providing equitable opportunities for small businesses to engage with us whether it is being a customer of the bank or it’s us providing educational opportunities or even providing charitable dollars for different community events and different community focuses,” she said.
About two years ago, M&T began working on a five-year diversity inclusion plan focusing on internal and external goals, including equitable opportunities, engaging communities and where charitable dollars are focused. “We created a multicultural division for the bank to really focus on how we are engaging multicultural communities,” Miller said.
Her team was created two years ago in an effort to help provide resources, including education, engagement and empowerment, to minority and women owned businesses. “Being in business can be very hard for anybody but it can be especially hard for diverse individuals,” she said.
M&T was a part of a 10-week minority- and women-owned business accelerator with the City of Baltimore two years ago and are planning to help put on three this year including one in Howard County. The banking institution has also donated money to the University of Maryland Baltimore’s Community Engagement Center.
“We provide a lot of financial support, but the thing that is really important to us is to make sure we are sitting right next to, elbow to elbow, with our community and making sure we are also showing up in ways outside of just giving dollars,” Miller said.