USBC Community Economic Development Corporation

Technology has transformed banking relationships at high-asset
financial institutions, however, banks still do not adequately served the needs of Black firms seeking capital.  Our solution is a three-tiered approach in providing capital to Black and BIPOC firms.  We are building a financing portal with Black and minority banks across three levels of need with benefits for businesses, consumers and lenders:

• Microlending (<$25k)
• Traditional Lending ( >$25k up to $5M)
• Equity investment

The underwriting technology is provided by FiServe - a major lending processor for banks and fintech companies.  It provides a consistent online and digital platform for all participants whether lender, borrower or investor.  The design addresses the inability of traditional banks to serve small businesses effectively combining tech, human consult and consistent guidelines needed in their financing process.  

FiServe powers the technology; Black and minority banks/lenders/investors utilize the platform for applications, products, programs and underwriting; we market using NABOB radio and digital stations; and businesses apply for financing through the tech portal designed to better serve their lending needs.  We connect our ByBlack directory and certification program and our network of 140 chambers nationally to engage Black and BIPOC firms with a myriad of financing needs.  Simply, we are the intersection of Innovation critical to remain competitive and meet the needs of our community.  Building our solution helps provide capital access for Black business owners, entrepreneurs and consumers, leverage and strengthen Black financial institutions and build long-term and generational wealth in the Black community

The problem we work to solve is simple - getting capital to Black firms who continue to be under-resourced and receive less capital than other firms regardless of diversity, size or employee base.  57% of Black owners are denied capital compared to 40% of white non-employer business owners. (Federal Reserve).  According to Brookings Institute,  If Black households held a share of the national wealth in proportion to their share of the U.S. population, it would amount to $12.68 trillion in household wealth, rather than the actual sum of $2.54 trillion. The total racial wealth gap, therefore, is $10.14 trillion. The 400 richest American billionaires have more total wealth than all 10 million Black American households combined.

The problem is nationwide and attributed to a number of factors.  

• Black businesses have opened multiple times during the pandemic despite not receiving the level of PPP funding or grants needed (only 20% of PPP funding) speaking to their resiliency
• The loss of neighborhood and community banks have a detrimental impact on Black firms - online lenders are the main source of credit for Black-owned small businesses, while other small businesses mainly drew nancing from large banks.
• According to a JPM Chase Study, Place Matters, Black firms had no safety net pre-pandemic with shaky cash positions, weaker banking relationships, and preexisting funding gaps.

Our solution to address this financing gap is to utilize technology to deliver more capital to Black firms that levels the playing field across guidelines, financing and wealth creation.

Problem:  The problem we are addressing is assisting with access to capital, capital campaigns, and/or financial education and information.  This has been a persistent problem since before the destruction of Black Wall Street.  Only 13% of Black-owned employer firms receive the full amount of a requested loan compared to 40% of white-owned businesses - even for Black-owned businesses with good credit scores. (Federal Reserve).  Black entrepreneurs receive less that 1% of venture capital.  It is time to level the playing field with a solution that 

Solution:  Create a digital funding platform that engages Black and minority banks to provide financing (grants, loans, equity) directly to Black firms.

Target Population:  The target population for this program includes:

• All generations - Boomer, Gen X/Y, Millennial and Oughts
• Existing businesses in operation three or more years
• Existing businesses with revenues of $50k or greater
• Loan purposes including working capital, equipment, etc.
• Firms seeking capital for procurement contracting, workforce expansion, e-commerce solutions, digital marketing, etc.

This new approach aligns to the Challenge in the following ways.

• Addresses a long-term problem - absence of capital in the Black community - with an accessible way of getting it to these firms.
• Drives expanding gig firms whose owners are participating in the Great Resignation and seeking to increase their income and wealth.
• Enables support to a new wave of burgeoning firms in traditional and non-traditional industry sectors
• Helps grow, develop and sustain Black firms, assisting in increase to pre-pandemic levels (2.8 million vs. 900k in 2021)

The target population of businesses we work with directly are primarily Black-owned firms (and BIPOC firms) who are members of our chambers and ByBlack platform.  According to a joint study conducted by Public Private Strategies and USBC in 2021, Black firms surveyed indicated these key needs.

• Contracts/Revenue Growth:  Incentives for government and large private sector organizations to use small business vendors  
• Access to a PPP Loan without any negative tax implications
• Access to additional low-cost, long-term debt financing to restart my business
• Tax incentives to help with reopening costs 

We currently serve these businesses with financial education seminars on contracting, access to capital, digital marketing, cybersecurity, e-commerce solutions, etc.  Working with our chambers of commerce, we regularly survey our members and joint sponsor work with others (e.g., ReImagine Main Street) to gain insight into the needs of our firms, enabling us to develop solutions to address them.  

This solution addresses the top 1-4 needs of our businesses - capital in all forms.  By creating a shared platform of service that gives a business owner access to a variety of financing solutions, we address a key need of access to capital.  

The communities we serve nationally include urban and rural centers in large cities and small towns with a myriad of industry sectors, revenue size anf employee base.

Businesses by Generation

25-34 13%

35-44 44%

45-54 35%

55-64 6%

Percentage of Average Revenue – 2021

$50K - $99,999 – 12%

$100K - $499,999 – 19%

$500k - $999,999 – 22%

$1 million - $4,999,999 – 23%

$5 million and above – 11%

Evenly distributed across Years in Business

1 to 4 years 37%

5 to 10 years 35%

More than 10 years 35%

Gender

Women – 44%

Men – 56%

The pilot launches May 2022 in Washington, DC and will operate initially in states where we have chambers on a rolling basis.  These include:  North Carolina, South Carolina, Virginia, Maryland,  Tennessee, Georgia, Florida, Texas, New Jersey, Pennsylvania, Washington, D.C., Delaware

Markets not included currently:  West Virginia, Kentucky, Ohio, Indiana, Alabama

Our mission is to sustain small businesses.  Our Five Pillars of Service are the cornerstone of our platform - Advocacy, Access to Capital, Contracting, Entrepreneur Training and Chamber Development.  They represent issues that greatly impact the growth of Black-owned businesses in America and, consequently, form the foundation of the USBC agenda.

Mission Statement:  The U.S. Black Chambers, Inc. (USBC) provides committed, visionary leadership and advocacy in the realization of economic empowerment. Through the creation of resources and initiatives, we support African American Chambers of Commerce and business organizations in their work of developing and growing Black enterprises.

We expect our solution to have a positive impact on the problem by increasing the amount of capital granted, lent or invested to our businesses.

• Increase the number of loans provided to Black firms.
• Increase the dollar amount of loans provided to Black firms.
• Expand the number of Black banks participating in the program.
• Expand the number of venture capital firms participating in the program.
• Highlight local community impact created by business scale.

Our third-party research highlights the importance of access to capital to Black firms and the systemic impact created by the lack of financing provided when needed.  Key findings are below.

• Forbes:  Why Black Owned Businesses Struggle to Get Loans
• Federal Reserve:  2021 Report on Minority-Owned Firms
• New York Federal Reserve:  Health and Wealth Impact on Black Communities

USBC's Theory of Change is to evolve the finacial services delivery ecosystem, processes and access into one that works for Black firms and small businesses.  By disrupting the current way that firms seek (or don't) seek capital, we open more accessible avenues in leveraging different types of capital based on need, term, rates while helping firms grow, hire more employees and provide meanfingul economic impact to their communities.

Activities:  Deliver seminars to improve knowledge on financing options and providers

Outcome:  Host a series of webinars to use the system, submit requests, seek additional capital resources

Short-Term: Firms attend preparation seminars to ready themselves for financing

Long-Term: Firms utilize beginning, intermediate and advance seminars for additional capital needs

The current number of firms served under this program: N/A - the pilot program is scheduled to launch by the end of May 2022.

The current number of firms served in other USBC programs:  11,000

The number of firms serving in one year:  150 (expect 300+ applications as the project is rolled out in markets)

The number of firms serving in five years:  10,000 firms (across various levels of credit - credit card, term loans, lines of credit, equity investments).

The communities we serve are urban and rural centers across the nation.  Key decision makers include our chambers of commerce, local government officials, local nonprofits, corporations and business owners.  Our organizational strategy is set by us and key bank partners - local influence is sought to include or launch special programs that can be aligned with a particular program (contracting, vending, etc.) or economic impact in the market.  

An example of this is Tulsa, OK where our women's business center partners with local government agencies to expand procurement opportunities in the market.  Our engagement with the local community helps us to plan for any changes to market promotion, credit product type, etc. so that we can implement a solution that meets the needs of the business owner and the government agency.

USBC CEDC serves as a HUB in the SBA's Community Navigator Program (CNPP).  Our strategy is informed by chambers and their engagement with the local market.  Our chambers of commerce and our otreach specialists leverage and utilize their stakeholder network to give firms access to information, resources, contracting and financing to help them succeed.  

The program strategy we implement with CNPP demonstrates the effectiveness of our approach.  

• USBC is the leading voice of Black businesses representing: 140 member Chambers of Commerce and affiliated Business Associations in 43states with a reach of over 380,000 businesses nationwide.
• Nearly 18% of Black business owners rely on personal credit cards to finance their businesses – paying much higher interest rates than a typical bank loan – compared to only 10% of white business owners.(Small Business Administration)
• We have launched and delivered smaller pilots as "test and learn" programs, building on our learnings and best practices to build and launch this new technology-sourced solution.

On the local, county and federal level, our leadership informs policy with an eye on  cultural engagement and needs that best helps Black firms experience sustained revenue growth.  We have also worked to build a network of diverse chambers, SBDCs, PTACs, CDFIs, women business organizations, nonprofit organizations, government agencies and others to deliver resources, information, procurement opportunities and capital to chamber members, ByBlack members and the many firms we serve annually.  This network enables a level of success to reach Black firms with this solution and aligns with the success of other programs we have built and delivered.

• For five years, our Solution Series program, worked directly with over 2,000 business owners delivered nationally to 25 cities. Approximately 15% or 300 businesses were referred to local SBA offices to assist with business planning and other services. 
• In 2016-2018, we worked with the Washington DC District Office to expand access to 8(a) contracting to MWBEs in conjunction with other diverse chambers.
• We launched our first affinity credit card pilot programin 2018 to provide consumers and small firms with small amounts of working capital via the USBC credit card.
• During the pandemic, we worked with BP Oil to provide grants and microloans to businesses located in MS, AL, and LA impacted by disasters (hurricanes, COVID-19, etc.).  We provided over $125,000 in grants and $30,000 in microloans to businesses that needed assistance.
• In 2020 we delivered programming to help firms navigate and move through the COVID-19 pandemic.  Our MBDA grant enabled us to serve over 5,000 firms with timely information and pertinent discussions on various topics to strengthen operations, management and financial processes.
• In 2021 we launched and introduced a certification program serving Black firms, going beyond the minority-certification programs available. ByBlack certification program
• IN 2021 we launched CNPP to provide technical assistance services through our chamber network to firms nationwide.  The program enables us to connect local ecosystem resources directly to firms needing support in obtaining capital, contracts and business operations.  This program is the natural progression to next-level growth that can be obtained by Black firms

Our outreach, communication and engagement strategies have been built over many years and are proven to reach our small business community.  We utilize an approach that includes

• Trusted collaborative partners
• A referral network of trusted providers
• Robust, digital strategy that includes newsletters, social media and digital posts, engaging with posts and answering business questions
• A proud partner of NABOB, which consists of 80 Blackowned radio stations and 12 Black-owned TV stations.

We have chosen these methods and expanded our digital engagement to meet business owners where they are - online, digital and on social media.  The use of local radio stations enables us to target messages and highlight initiatives with local influencers - chamber leaders, business leaders, nonprofit and government leadership - to support and provide credibility and trust in messaging.

An example of our use of outreach and communication results from a 2021 webinar highlights our capabilities in reaching our target audience.

Our project demonstrates our capabilities, strategic alliances, successful program management and expertise in serving this target market. Our impact goals are outlined.

1. Align businesses with digital solutions, capital referrals and supply chain access.  Impact:  Conduct centralized brand awareness promotion to annually reach 50,000 MBE firms with tools and resource information. E-communications (webinars, e-blasts, social media, etc.) are scheduled weekly. This helps drive clients and program participation.

2. Promote certification programs as a means for growth.  Impact:  1) Connect 10,000 Black firms over two years to the ByBlack.us platform to register for Black certification and onboard businesses to increase revenue opportunities. 2) Connect 2,000 MWBE firms to local, state, and federal certification programs. This goal supports businesses seeking to expand through increase sales and contracting.

3. Provide nationwide assistance.  Impact:  Coaching and counseling hours (5,000 annually) with PTAC, SBIR, lending, venture capital firms interested in providing alternative financing to MBEs to help them secure funding to grow, hire and retain jobs. 2)  Host 500 webinars, training and referrals with small business financial education, loan packaging instruction, PTAC and SBIR guidance, technical assistance and CDFI microloans to successfully access and complement growth goals.

4. Leverage and provide capital to small businesses to take their firms to the next level.  Impact:  Utilize our pipeline of 25,000 ByBlack firms to launch program and add paid social media advertising to expand brand awareness and reach.

We are well positioned and experienced in managing projects of this scope. Our team's expertise across numerous areas:  financing, certification, contracting, supplier diversity, event management, marketing, etc. demonstrates the creative ways  we leverage resources while maximizing impact.  The staff is representative of the businesses we serve across ethnicity, generation, gender identity and is resourceful in creating solutions to meet the ever-changing needs of our firms.  This dedicated group identifies business needs, formulates strategy, delivers content (webinars, social posts, articles, events, etc.) and drives engagement with our business owners.

We completed a year-long Virtual CARES Act project with the MBDA,  delivered over 20 corporate partner programs and webinars, and hosted three annual conferences utilizing the talents of the team in virtual and hybrid engagements.  Examples of our demonstrated outcomes include:

• Our Millennial Entrepreneurs Redefined, initially funded by MBDA, touched over 20,000 millennials through social media, e-blasts and flyer postings exceeding our goal of awareness to 1,000 millennials per market.
• Our Capital Pathways program, initially funded by MBDA, created ecosystems of providers and partners in 10 markets, reached 1,402 business owners and connected with CDFIs, banks, equity investors and local/state economic development agencies.
• USBC CEDC managed a Capital Region Small Business Transportation Resource Center (SBTRC), with the U.S. Department of Transportation (DOT) Office of Small Business Disadvantaged Utilization (OSDBU). We directly served over 120 DBE firms in the region with technical assistance, reached over 2,000 monthly with information and procurement opportunities and provided $45 million in construction bonding.

This partnership with Truist Foundation Inspire Awards gives us not only capital but much-needed resources to refine our business model, scale our program to reach, serve and fund many businesses beyond our pilot phase.  Our ability to participate in MIT Solve expands our capabilities within a comprehensive program that can take our vision into the future - for investment capital, venture funding for firms, and a network of potential funding vehicles - which are not accessible to us in this moment.  

The primary barriers outlined earlier - financial and technical - are ones that can be solved with the resources offered through the grant and MIT Solve.  We need to expand our prospect list of potential contributors, especially in multi-year grant or endowment opportunities, to ensure that our organization can serve Black firms now and in the future.  Technology is a game-changing solution - just as we've had to pivot during the pandemic into digital spaces, the expansion and use of technology solutions can be provided in this program.  

We have first-hand knowledge, national relationships, and expertise to help minority and Black firms with access to capital and financing, supplier diversity contracts and business tools, consult and resources to increase revenue and expand through joint ventures and alliances to grow their businesses.  Our organization needs the next level of partnership - resources, guidance and introductions that can be obtained by our partnership in this program.  Because we lack resources to market via paid advertising, larger PR platform or local news stories, partnering with Truist and MIT Solve can help us reach a broader audience through in-kind contributions of resources, contacts and partnerships beyond our current collaborations.

The types of organizations we would like to partner with include (in broad categories):

• Large general market media outlets that can reach our audience through targeted media, campaigns and spend
• Philanthropic organizations interested in DEI, small business and support of Black-owned business' future growth and sustainability
• Corporate giants like Ken Chenault and Ursula Burns who can provide insight not only in the credit markets but potential board prospects that can move the organization into the future.