We are proud to implement a new and innovative loan program designed to make low-cost capital available to African American Chamber of Commerce member business owners and entrepreneurs across the U.S. to help them build, grow and expand their businesses. The African American business communities have been historically under served. Many African American small business owners currently report a problem of accessibility to capital. The mission of this Chamber Fund is to not only solve for this critically absent availability of affordable capital but also to make capital available on fair and transparent terms.
As background, during the 1980’s, approximately 14,000 community banks across the nation served locally-based businesses. Between 1989 and 1995, approximately one-third of these banks closed at the direction of the US Government’s Resolution Trust Corporation, which not only dissipated local market presence but also national presence. Following the 2006 subprime crisis, another one-third of community banks shuttered. The remaining one-third of community banks that survived targeted affluent communities, ignoring a particularly acute demand for capital in minority communities.
Into this void, alternative business lenders have aggressively entered the market to meet small business demands for readily available capital. This new source of capital into minority communities has not provided a sustainable source of financial relief, however, for African American small businesses, as many of these new lenders, in the absence of any regulatory oversight over these markets, have taken unfair advantage of their borrowers, promising them quick access to capital in exchange for unreasonably expensive repayment terms that they may not even need.