NJ fund offers loans to Black-owned firms impacted by COVID-19

Help for businesses that do not have easy access to capital
Credit: (AP Photo/Matt Rourke)
File photo: April 28, 2020, shuttered businesses along the boardwalk in Atlantic City

Like countless small businesses across the country, N&R Divine Cleaning Service in Hackensack saw its client base dry up when the coronavirus pandemic struck last year. Offices, schools, and fitness centers were all forced to close for a few months and no longer needed professional cleaners.

“It was not a good feeling,” said owner Nadine Brown, who had to use her savings to pay bills and buy groceries.

Brown, who was out of work for three or four months, said she applied for loans to support her business but wasn’t successful. Since her one-woman firm has only been in operation for a couple of years, Brown said banks looked at her personal credit score, which was “not that great.”

That was when she learned, through a connection at the African American Chamber of Commerce of New Jersey (AACCNJ), about a program to help Black-owned businesses access capital in the wake of the pandemic.

The Equitable Small Business Initiative, run by the AACCNJ and New Jersey Community Capital, is a $5 million (and growing) pot of money used to award loans to businesses owned by people of color most impacted by the pandemic.

“This will do a lot to help those businesses — those small businesses — that do not have the relationships to access capital, that do not have the relationships to get the technical assistance, to bring their ideas into the economic mainstream,” said AACCNJ founder and president John Harmon.

Two kinds of loans

Two types of loans are available through the program: pandemic relief loans up to $75,000 for businesses with 75 or fewer employees and business expansion loans up to $250,000 for companies of any size.

Although the pandemic shook the economy as a whole, people of color-owned businesses were already at a disadvantage compared to white-owned companies. According to the U.S Department of Commerce, “minority-owned firms” were more likely to be denied loans than non-minority firms and, when they got loans, received less money.

Wayne Meyer, president of New Jersey Community Capital, the nonprofit lender, said the organization has always aimed to help underserved populations that traditional banks and other financial institutions “shy away” from because they perceive the investment as risky.

“Our track record proves the opposite,” Meyer said. “We’ve learned that you can manage risk. Income, race, and gender are not reliable financial indicators of performance.”

Interested businesses can apply for loans through the Equitable Small Business Initiative online.

For Nadine Brown, who closed on a $15,000 loan through the program last month, the infusion of cash will allow her to expand her cleaning service business.

“I’m home-based now, so I’m going to open an office for myself,” she said.

Brown said she intends to use the money to rent a new workspace, buy new equipment like a computer and a vacuum cleaner, and maybe hire someone to help with marketing.

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