By Christina M. Long,
Wichita Urban E-Community Manager, NetWork Kansas
Clark Bastian, left, Fidelity Bank, Chairman of the Board, stands with Christina Long, with NetWork Kansas. Photo credit: Fidelity Bank
Race relations, police practices and the impact of COVID-19 are propelling a feeling of unrest, uncertainty and tension across the United States. The disproportionate impact of these three issues upon African-Americans has prompted a series of responses ranging from people of all backgrounds flooding the streets in protest to a barrage of social media posts, tweets and snaps written from a multitude of perspectives. Whether agreeing with the responses or denouncing them, the root of the inequities experienced by the African-American community should be addressed including roots that have created inequities in economic development and entrepreneurship.
Specific to lending, numerous reports show that small, Black-owned businesses were largely shut out of the Paycheck Protection Program (PPP), a loan fund that was meant to bring rapid assistance and financial relief as part of the Small Business Administrations COVID-related Disaster Relief Funds. The unfortunate fallout over PPP lending provides a recent example of the economic inequity too often experienced by African-Americans. Now legislators and organizations are pushing for set-asides in potential future funding rounds to ensure minority entrepreneurs gain access to PPP funds that were intended for all entrepreneurs in the first place.
When NetWork Kansas formally announced its Restart Kansas County Loan Fund program on the steps of Fidelity Bank in Wichita last week, I stood proud knowing that the collaboration between the two groups yielded a surprising result in the Wichita-area: 100 percent of approved applicants for Restart Kansas loans in Wichita were African-American. Although any entrepreneur in Sedgwick County could apply for Restart Kansas funds, the Black business community acted swiftly, which led to $91,500 in approvals made by the Wichita Urban Entrepreneurship (E-) Community, which is affiliated with NetWork Kansas.
Restart Kansas terms are quite appealing. Businesses in a participating county can request a loan of up to $20,000 with a 2 percent interest rate for 48 months and payments deferred for four months. Previous to Restart Kansas, the Wichita Urban E-Community approved one loan to an African-American owned company. The ability to qualify for matching funds to secure an E-Community loan has proved challenging for some applicants.
Similarly, another loan fund I operate in Wichita, called the Create Capital Fund for minority-owned businesses, has made three approvals since launching in 2018. Though this funds pace is slower than organizers anticipated, these loan approvals have still led to job creation, helped stabilize financials and, in one instance, helped a company mobilize to acquire another resulting in significant growth that may otherwise have been delayed.
Funds like these have been established to try and remedy bias in lending practices that, combined with other factors, have largely prevented African-Americans from being able to access capital at the same rates as their peers. Fidelity Banks Bravely Onward Fund at the Wichita Community Foundation provided the initial funding for the Create Capital Fund and has matched contributions up to $100,000.
In NetWork Kansas case, Fidelity initiated discussions about the need for a more permanent local emergency loan fund, which led to the launch of Restart Kansas in Sedgwick County and then throughout the state. In addition, Fidelity provided the first round of funding in Sedgwick County, where Wichita is located. INTRUST Bank, Emprise Bank and Evergy, an energy company, have contributed to a second round of funding that will benefit the Wichita area.
As lead for the Wichita Urban E-Community and a Black business owner, myself, I recognize several key factors that contributed to African-Americans experiencing different outcomes in Restart Kansas initial approvals in Wichita:
1. Diverse representation in leadership: The Wichita Urban E-Community is one of NetWork Kansas most diverse E-Communities, for example. Several African-Americans in addition to myself serve in leadership positions on the E-Communitys general board and on the Loan Review Committee. Since the Wichita Urban E-Communitys launch in 2012, the group has worked to change mindsets, sharpen skill sets and provide access to funding and tools to help improve entrepreneurship in distressed communities in the greater Wichita area.
Wichita Urban E-Community members. Photo credit: Christina Long
2. Diverse organizations collaborating to create an inclusive funding decision-making process: Unlike the PPP, which relied on banks to process loan applications, NetWork Kansas placed decision-making about loan applications with E-Communities, which are active in 66 communities in the state. These E-Communities have representation from a number of perspectives, not just a predominant traditional lending vantage point, to help make urgent funding decisions in these unprecedented times.
Wichita Urban E-Community has representation from the Wichita Regional Chamber of Commerce, three banks: INTRUST, Emprise and Capitol Federal; an accounting firm, Sabala, Harmon & Case CPAs; entrepreneurship support organizations: the Kansas Small Business Development Center, the Wichita District Office of the SBA, the South-Central Kansas Economic Development District, Kansas Business Services, LLC and Create Campaign. Many of the entities provide on-the-ground support for entrepreneurs and several have initiatives specific to diversity and inclusion, which helps to reduce the proximity between the Wichita Urban E-Communitys work and diverse entrepreneurs. Closer proximity helps to deliver more expedient services because it shortens or completely eliminates the time spent trying to determine which channels to access to reach diverse entrepreneurs who are often described as overlooked and underserved. Most, importantly, NetWork Kansas entrusted others to make decisions about its assets.
3. Consistent engagement over time: NetWork Kansas began creating programming and infrastructure to support its inclusive entrepreneurship work long before any of the current protest demonstrations. Its E-Community initiative promotes the Ice House program, which is based on an African-American author, Clifton Taulberts book, Who Owns the Ice House. The entrepreneurial mindset is examined through this course and book.
NetWork Kansas was one of a handful of states that used funding from the federal State Small Business Credit Initiative (SSBCI) to create the Women and Minority Business Multiplier Loan fund. The program, which launched in 2012, provides more favorable lending terms and serves as another way that NetWork Kansas positioned itself to more intentionally reach these groups.
In 2015, NetWork Kansas initiated a partnership with my inclusive entrepreneurship work that has become multi-faceted over the years. NetWork Kansas provides funding and encourages its staff to proactively engage in Create Campaign workshops, trainings and programs to provide better wrap-around support to participating entrepreneurs. NetWork Kansas has even contracted with my for-profit marketing company to provide communication and programming consulting, helping to diversify the organizations supplier diversity and minority business spend. In doing so, NetWork Kansas provided me a pathway to grow our combined inclusive entrepreneurship work from Wichita to Kansas City, which resulted in the Kansas City, KS Urban Entrepreneurship (E-) Community being added to NetWork Kansas E-Community initiative in 2019.
4. Having leadership that values inclusion: NetWork Kansas leadership values diversity and inclusion and demonstrates that value through substantive programming not lip service. Leaders and staff members went well beyond the feel-good portions of the work with me in 2015 to explore challenging topics related to bias and barriers in lending. By doing so, they gained a deeper understanding to then build more relevant and sustainable programming and lending solutions for minority entrepreneurs.
Steve Radley and Erik Pedersen of NetWork Kansas. Photo credit: Christina Long
I, too, stretched, as well.
Theres a mutual respect and a spirit of wanting to create meaningful and impactful change that keeps even difficult conversations focused on the greater good. The residual impact of the work is feel-good and systemically good, for NetWork Kansas, its partners such as Fidelity, the Create Campaign and for the entrepreneurs who experience different results in the lending landscape.
Remove diverse leadership, representation, consistent engagement over time or leadership valuing inclusion and see how systems and programs are affected. Even the most well-intentioned programs can suffer from unintended consequences. And, while Restart Kansas is a great example, there are other programs that need to be bolstered and programs yet to be discovered that can prove to be game-changers for minorities in entrepreneurship.
At a time when many are asking, What can I do? Im proud to walk daily in inclusive entrepreneurship work with committed partners looking to identify and scale solutions such as NetWork Kansas and Fidelity Bank. If our country is going to shift the experience for minorities in entrepreneurship then we must acknowledge structural inequities. We must talk about the inequities and not be overwhelmed, weary or paralyzed with helplessness. We must intentionally move forward through understanding and action.
Im thankful for the very real example of Restart Kansas impact in Wichita and how this lending model can serve as more than an inspiration, but a demonstration, to others looking to truly advance inclusion in entrepreneurship.