Three historically Black colleges and universities in Louisiana are among nine higher education institutions in five states tapped to connect small business owners with help in a new loan and educational program.
Baton Rouge-based Southern University and Xavier University and Dillard University in New Orleans are participating in a small business loan program through Goldman Sachs 10,000 Small Businesses and Hope Enterprise Corporation, which runs a Jackson, Mississippi-based credit union that specializes in lending and other financial services to underserved communities.
The Deep South Economic Mobility Collaborative has $130 million to disperse across seven cities: Baton Rouge; New Orleans; Birmingham and Montgomery, Alabama; Little Rock, Arkansas; Jackson, Mississippi; and Memphis, Tennessee.
The effort includes access to capital, business education courses and support services.
"We are poised to assist thousands of Black- and women-owned businesses," said Ray Belton, president-chancellor for Southern University.
It’s estimated that well over 100,000 small U.S. businesses have failed since the COVID-19 pandemic began, with underserved communities struck especially hard. Many struggling companies were unable to get loans, including newly formed businesses and those whose financial records didn’t meet bank requirements.
“We’ve seen businesses close in record numbers, particularly small businesses, mom and pop businesses, those owned by people of color,” said Bill Bynum, CEO of Hope Enterprise Corporation. “We think right now the resources that we have and the partnerships that we can bring to bear with cities and with anchor institutions like HBCUs is needed now more than ever.”
The collaborative is something like a “one-stop shop for business support," said Bynum.
A June study by University of California, Santa Cruz economist Robert Fairlie showed that while 22% of businesses nationwide closed in the immediate onslaught of the pandemic, the situation was far worse for minority-owned businesses: 41% of Black-owned businesses and 32% of Latino-owned businesses closed, compared to 17% of White-owned companies. When later data showed a business rebound, minority-owned businesses were slower to reopen.
Participating small business owners can access capital provided by Goldman and take online classes offered through Goldman's 10,000 Small Businesses Initiative. Other resources include small business development centers offered by some HBCUs, and procurement and contracting programs in certain cities, Bynum said.
The project aims to help small businesses not just survive the immediate loss of revenue but figure out how to adapt their economic models for the long haul, said Margaret Anadu, Goldman Sachs managing director and head of the urban investment group. For example, how do they create an e-commerce portal or develop better social media strategies?
Any business owner in the five states can apply, but the program aims especially to help minority-owned businesses in a region that has struggled to address deep poverty and racial economic disparities. Organizers estimate that about 5,000 small businesses could go through the program.
Other participating universities include Alabama State, Miles College, Philader Smith College, Jackson State University, Tougaloo College and LeMoyne-Owen College.
More information is at hopecu.org/deep-south-economic-mobility-collaborative/#GS10KSB .