Ask any small business owner and they’ll likely tell you securing a loan is no easy feat. And if the proprietor is a minority or a woman, the barriers to capital are often tougher to break.
According to 2015 figures by the U.S. Small Business Association, minority-owned businesses make up 30.9 percent of all small businesses in Oregon.
But while that number is a slight increase from previous years, the financial challenges facing these groups far outpace non-minority entrepreneurs.
It’s the reason Ascent Funding formed back in 2008. Originally called Albina Opportunities Corporation and headed by Terry Brandt, the nonprofit worked to address financial discrimination facing Black-owned businesses in the Albina neighborhood of North and Northeast Portland.
The company’s support grew to include minority and women-owned business and those in low-income communities throughout the Portland Metro area. Today, Ascent Funding offers various loans and lines of credit to businesses that have been turned down by banks.
“Sometimes we’re able to help them if they have a low credit score or not enough collateral,” Robin Wang, executive director of Ascent Funding, told The Skanner. “But we were thinking, what if we could prevent that in the first place?”
It seems the plan has hatched. On Feb. 2, Ascent Funding is sharing its knowledge and expertise with novice business owners in a public event it’s calling “Breaking the Barriers to Capital.”
Taking place at the Curious Comedy Theater in Northeast Portland, “Breaking the Barriers” will bring together business leaders, lenders and experts to offer advice on how minority business owners can get their ducks in row when it comes to securing capital.
Guest speakers include entrepreneurs Jamaal Lane, owner of Champions Barbershop and Barbering Institute, Paige Hendrix Buckner of ClientJoy, and Chris Guinn III of Dwell Realty, all of whom will share their lessons learned – both the positives and the pitfalls – while navigating the financial terrain of small business.
“Entrepreneurs don’t understand the lending and borrowing process. It’s much different than getting a credit card,” said Wang.
When young businesses are applying for loans over $20,000, Wang said they need to be prepared to talk about their personal finances, which can be intimidating or uncomfortable for some and even a deterrent for others.
“People who might be disenfranchised with banks and the American financial system, they could say, ‘I don’t want to deal with it,’” he continued.
“Breaking the Barriers” is aiming to change that by aligning bankers with the business community to get young entrepreneurs comfortable with asking questions and sharing their stories.
A common mistake of first-time business owners is getting into unintended hot water with the IRS. Entrepreneurs often misstep by dipping into their payroll taxes to cover cash expenses. Before they know it, they owe much more to the IRS in back taxes.
“Once the IRS has a lien on your business, no one is going to lend to you, even five years after you’ve paid back the IRS… So our panelists are going to be preaching, ‘Don’t mess with the IRS,” Wang said laughingly.
The event will also touch on the toll of bootstrapping, transitioning from friends and family funds to institutional financing, and factors that help a ‘barely bankable’ business secure a loan.
During a second panel, a host of local bankers will shed light on the loan application process by using specific application examples to break down what works and what doesn’t.
Before the event wraps, attendees and budding business owners will have a chance to network with local organizations – like MESO and the Small Business Association – that can offer information and resources on getting loan ready.
“What we’re hoping to do is at least start bridging those relationships at this event, and hopefully make opportunities to foster those going forward,” Wang said.
Admission to Breaking the Barriers to Capital is $5. To register or for more information, visit www.BreakingBarriersCapital.org.