FAMU Credit Union to administer DEO loans to Black businesses
By St. Clair Murraine
Outlook staff writer
Making a point about what he envisions with the announcement that FAMU Credit Union has $1.1 million to help Black owned businesses, Ernest Allen shared a brief but vivid memory of the days when business in Frenchtown was robust.
Many of the businesses were owned by Blacks. The community thrived all around, Allen, president/CEO of the credit union recalled.
“When businesses are strong in the community, that helps everything from education, employment, families, and I’ll go as far as saying lowering crime rates,” Allen said. “We are going to do everything in our power to make this a strong program.”
Allen shared his assessment a week ago when officials from the Florida Department of Economic Opportunity announced that FAMU Credit Union will administer the agency’s Black Business Loan Program.
The program, which has $1.1 million to lend, is already underway and is available to Blacks who want to start a business anywhere in the state. The program provides funding to Black businesses that can’t get capital through conventional lending institutions.
One main qualification requires that businesses applying for loans from the program have to have a 51 percent Black ownership. The minimum is $10,000 with a maximum to be determined by the credit union, Allen said.
Funding for the program is earmarked by the legislature. It’s the first time since the program was initiated almost 20 years ago that a credit union is administering it, said Cissy Proctor, executive director of DEO.
“There are a lot of opportunities to break down silos to work together,” said state representative Ramon Alexander, who helped to push through legislation to fund the program. “I can’t think of any greater institution to be the keepers of those funds so we can maximize those funds to make the biggest impact as possible.”
Representatives from the Small Business Development Center at FAMU and the governor’s office of Economic Vitality for the city and Leon County also attended the press conference. Both agencies will provide resources to potential business owners to prepare their presentation for loans.
Having a ready source of funding other than a conventional loan, which could be difficult for a start-up to obtain, could help businesses flourish, said Al Latimer, director of the Office of Economic Vitality.
“There is nothing like being a business owner who is working hard every day,” Latimer said, “trying to just maintain or move their business to the next level and not be able to have access to financial tools that will allow them to achieve their goals.”
The program is expected to generate some reprieve for Black business owners in the state. The U.S. Department of Commerce issued a report that shows minority businesses are more likely to repay loans at a rate nearly three times higher than businesses that are owned by non-minorities. Additionally, Black businesses are less likely to get loans and when they do, it’s generally on the low end.
Proper preparation could help avoid some of the pitfalls that Black owned businesses enter, said Gerald Hinson, a consultant with the Florida SBDA at FAMU. Allen suggested that loan applicants use the resources available through the SBDA.
“Our role is to support small business needs; from preparing a business plan to preparing their loan package, said Hinson. “Our objective is to make sure that they are as competitive and prepared as any other business and keep their mindset on that.