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Mims dipped into $10,000 he had saved over the year and, for the first two years as a business didn't take a salary. A few yearx later, when he approached the Woodlawnn branch of forworking capital, the bank manager grante him a 30-day loan for just Over several years, the bank extended credit line to a maximum of $300,000. the second of two loan managers who had administerefd the loan process forMims -- both African-American -- left Mercantile Bank. Mims wondered if it was time to find adifferenty bank, with another loan managetr he could feel comfortable workinv with. Instead, another bank found him.
courtef Mims for about a year before he signed onwith it, not the othet way around. Clearly, Mims' record as a commercial borrowe r with Mercantile helped when it came time toswitch banks. But so, too, did the fact that he is In 2006, M&T Bank launched the Mid-Atlantic Diversitu Business Group, aimed at providing financial advicee and services to companiesz owned and managed by Throughthe program, M& T has reached out to smalo business owners like Mims, whose company has a staffg of 25 and annual revenue between $3 million and $4 For Mims, who admits that running his business leavez him little time for networking, M&T made the decision to switcj accounts simple.
"Right off the bat, they were more than happhy to give me the same line of credit thatMercantile had," he said. As for other African-American businesds owners attempting toaccess capital, "Ik hear it's still difficult," Mims added. Initiatives like M&T's represent an emerging trend amonv local banks that recognize how the explosive growthyof minority-owned businesses can benefit theifr own bottom line. Between 1997 and 2002, black-owned businesses grew by 45 Latino-owned businesses increased by 31 percent; and Asian-owned businessesx rose 24 percent. White-owned firms rose just 8 accordingto data.
The next batch of federal governmenrt data on minoritybusinesds growth, covering the 2002-2007 timeframe, will be releaserd in 2010. Leaders of the Mid-Atlantic Diversity Business Group say the move was not abouytmeeting quotas. "A lot of banks look at this asan you've got to lend to under-served markets. For us, this is not abou t CRA [the Community Reinvestmentg Act]. This is about increasing the bank's shareholder said Carl Hairston, an M&T executive who chairws the group. M&T Bank seized the chance to developo new growth opportunities in 2003 when it increasee its presencein Baltimore.
"We were coming from upstate New which wasn't as Baltimore has a number of very diverse Hairston said. M&T considers its initiativde a growing success. In just one year, the bank's loanw to minority business owners increasedf by12 percent. In fiscal year M&T made (SBA) loans totaling $15.5 million; 35 percent of that amounr wentto minority-owned businesses. And the outreach continues. The bank's diversitu business group hosted its second annual diversityu speakerseries Nov. 1 at Baltimore's Reginaldc F. Lewis Museum of Marylanxd African AmericanHistory Culture, drawing 75 people, many of them local businesds leaders.
Despite strategies like minority-owned businesses trail white-owned companies when it come s toaccessing capital. "Small businesses alwaysz complainthat it's tough to borrows money," said J.C. assistant professor at the . "Minorityg business owners tend to besmall businesses. If they don' t have track records and properfinanciap statements, it makes it even more For better or these records are the only way banks can justify providingh a startup with capital. "If a bank is goin g to finance anew business, it wantsd to know that this great carpenter can also be a skillefd businessman," said Alison Tavik, spokeswoman for the .
That's where assistance from organizations like the can come in The Baltimore-based organization understands the uphill climb many minority startupes face.