Cash is important to the success of any business, and access to it is more crucial now than ever before. How are firms, especially minority-owned businesses that face greater challenges, finding capital right now? We teamed up with OZY to bring you tips on financing for Black entrepreneurs. Just as OZY breaks the media mold in bringing their readers diverse and surprising perspectives, Ally was built to serve customers digitally since day one — a relentless financial ally for all things money. Read on for more about how to find your path.
1. Start early.
Generational wealth — including access to capital for businesses — can be traced in many ways to basic financial education. “Money is one of those topics where if you’ve got a lot of money, you don’t want to talk about it. And if you don’t have a lot of money, you don’t want to talk about it. So, people just don’t talk about it,” says Jacqueline Howard, senior director of corporate citizenship at Ally. “And it’s when we have this lack of conversation that people don’t learn.” To that end, we at Ally published a financial education book called Planet Zeee and the Money Tree to help teachers and parents provide fun financial instruction to kids.
2. Get a lawyer.
You might think of banking and law as separate silos, but a skilled attorney could be perfect teammate to help you address any financing woes, says Dr. Yolanda Ragland, a foot surgeon and owner of Fix Your Feet. “Hiring a corporate lawyer who knows how to navigate these systems precisely is a powerful source to get ahead of the game and save time and money in the long run regarding banking, financing, and upward mobility,” Ragland says.
3. Sign of the Times
A national spotlight on racial justice in recent months has brought a renewed focus on the challenges for entrepreneurs of color — along with expanded opportunities. Banks are increasingly sharing profits with the types of business communities are supporting, says Candice Matthews Brackeen, founder of Lightship Capital. “There is kind of a big push to buy at Black-owned businesses and restaurants and sharing and distributing the wealth,” Matthews Brackeen says. Check out banks in your area to see if they’re offering specialized programs. For example, we at Ally are teaming up with the Local Initiatives Support Corporation to fuel entrepreneurship and homeownership in Philadelphia, Charlotte, Detroit, and Jacksonville. “It’s not only helping small businesses with funding they need for their businesses, but it’s also: What are the supports that you need in order to be a successful small business?” Howard says. “Oftentimes our underserved communities don’t have that type of exposure or the opportunity. And I think it’s up to organizations like Ally to create those opportunities.”
4. Deus Ex Machina
In Cincinnati, an accelerator program housed in the local chamber of commerce is taking companies with no clear succession plan and matching them with Black entrepreneurs. “There are trillions of dollars in play when it comes to the transfer of wealth from one generation to the next — these sellers are trying to figure out how they exit,” says Darrin Redus, executive director of the Minority Business Accelerator. “We can literally create minority firms of size via acquisition.” There are unusual opportunities and pathways like this in communities across the country. As Matthews Brackeen says: “Every town has its own Meetup groups.”