A new program aims to help Black business owners close the racial wealth gap by helping connect them with capital.
Capital Connect, a Metro Detroit Black Business Alliance program, wants to help create and sustain successful businesses.
“[Black people] in this country have been intentionally and historically disinvited from the table,” the business alliance’s president and CEO Charity Dean told the Detroit Free Press. “In order for us to get some sort of equity, some semblance of equity, a drop of equity, we need more funding partners that are willing.”
Numerous studies have highlighted the financial disparities between white and Black business owners. For example, the National Community Reinvestment Coalition found that banks treated applicants differently based on race as businesses sought pandemic-related Paycheck Protection Program loans. According to a 2021 report in Nerd Wallet, small white firms receive about $30,000 more in funding than similar small Black-owned businesses, which also paid higher interest rates. Startups owned by Black people received about $500 in outside equity versus $18,500 for white companies, the report also found.
That’s why Capital Connect is important to business owners like event planner Britney Hoskins. She secured a $200,000 business loan through the Small Business Administration and a $25,000 line of credit from a company that provides loans to small businesses. She was able to get the funds “because I have people who rally behind me,” she told the Free Press. She said she’ll use the money to build inventory and hire more workers.
“Somebody believed in me enough to say, ‘Hey, here’s some money, go do some amazing things’,” Hoskins told the Free Press.
Capital Connect started in 2021 and runs a 12-week program that helps participants understand how to create a business and financial plan, pitch their business, and more. Held in downtown Detroit, the program is free for business alliance members. Currently, 18 people are enrolled.
Pitching the business – or telling its story – is an often overlooked component of business planning, Autumn Kyles, Capital Connect program manager, told the Free Press. She said learning to do so is part of the program.
“I think a big piece of convincing someone that you deserve money is about you being able to confidently tell your story,” Kyles said. “Not a lot of people really know how to craft a story that can sell why they can grow and why they need the money to grow.”
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