Black business owners: Here's how to get access to free training, loans

Several programs can link Black business owners with the help they need to start and expand their businesses.

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You have a killer business idea but don’t know where to start.

You need to learn the basics of running a business.

You want to expand your business but don’t know how to access loans.

You’re not alone.

The Iowa Secretary of State last year saw a record number of business filings – even during the shaky economic climate caused by the coronavirus pandemic. Nationally, Black businesses were among those hardest hit during the pandemic, but have now begun to rebound. By third quarter 2021, the number of Black small business owners had increased 28% compared to pre-pandemic levels, according to U.S. News & World Report. Black business owners account for 26% of all new microbusinesses, up from 15% before the pandemic, according to the Brookings Institution.

A nonprofit council of Black business leaders in the greater Des Moines area organized a small business roundtable to connect business owners with expert help from the Small Business Administration (SBA), Iowa Center for Economic Success and the Targeted Small Business Program. Officials discussed certification, training and loan programs during the virtual meeting organized by the Directors Council, which operates the Black Iowa Business Directory. Weslyn Caldwell, the council’s business empowerment and incubation coordinator, facilitates a monthly roundtable.

Photo credit: Getty Images.

State and federal officials discussed several business programs available to Iowans.

  • Lori Hackney, administrative officer, economic development specialist, Women’s Business Center representative and the SBDC project officer for the Iowa district office.
  • Dawnelle Conley, deputy district director, SBA Iowa district office
  • Jose Venales, director of microloans at the Iowa Center for Economic Success
  • Jill Lippincott, TSB certification project manager
  • Kymberly Stevenson, TSB business development project manager

The SBA is the only federally-funded agency designed to assist small businesses get in business, stay in business and grow their businesses, Hackney said, during the roundtable attended by about 20 people. The agency, with resource partners across the state, concentrates on counseling, credit and contracting, she said.

The experts described the programs, application process and offered tips on accessing help.

Iowa Women’s Business Center

The Women’s Business Center is open to women and men, Hackney said. A new program, Ascent begins on May 5. It’s self-paced online program covering different business content areas.

America’s Small Business Development Center (Iowa)

There are 15 centers throughout the state, which are mostly located on college campuses, Hackney said. The centers can assist participants with all phases of business development.

Iowa Center for Economic Success

Jose Venales, director of microloans, said the center serves people who are planning, starting or growing a business. Participants can take business training and development classes, including accounting, legal, marketing, bookkeeping and more.

“We do all this education to make sure you’re ready, and then we’ll get you to the capital,” Venales said.

Applicants can apply for microloans for up to $50,000. Businesses with revenues under $4 million can apply for the following loan terms, he said:

  • Annual fixed 6% interest rate
  • 3 months grace period
  • Fixed monthly payments
  • No prepayment penalties
  • Up to 5-year terms
  • No down payment

“Every business at any point is going to need some capital – even if they’re starting, if they’re at their peak,” he said.

Photo credit. Getty Images.

He said the money can be used to purchase equipment and to open a new location.

“Once you come to us, we look at different options, so we make sure you’re getting the right product and the right loan,” he said.

Targeted Small Business Program (Iowa Economic Development)

Jill Lippincott, TSB certification project manager, said the TSB program includes two parts: a credentialing program and a loan program. TSB participants must meet the following criteria:

  • Be 51% owned, operated and actively managed by a woman, minority group, person with a disability or service-disabled veteran
  • Minority includes African American, Latino, Asian, Pacific Islander, American Indian or Alaska Native
  • Must be in Iowa
  • Operate for profit
  • Have a gross income of $4 million or less

Participants must submit documentation, including tax documents. Lippincott said the benefits of becoming certified with the TSB program include being listed in an online public directory, which is promoted to state buyers. Loans are also available.

Lippincott said the state of Iowa purchased $39 million from the TSB program in 2021. At that time the directory contained about 800 businesses, she said. One other benefit: TSB participants don’t have to go through a formal bid process for purchases under $25,000, she said.

“This directory allows you to be found by state buyers, by the general public,” she said.

While the program only applies to State of Iowa purchasing, companies, cities and counties are beginning to use the directory to enhance their supplier diversity, she said.

To become TSB certified, applicants must complete an online application and submit the required documents. Applicants will receive help completing the paperwork, she said.

Credit: Getty Images.

Microloan Program (TSB)

Kymberly Stevenson, TSB business development project manager, handles TSB’s loan program. She said applicants don’t have to be certified with the program to apply or receive a loan of up to $50,000, which can be used to start or expand a business.

What the loan can be used to purchase:

  • Business improvements and expenses
  • Purchasing equipment
  • Furnishings
  • Inventory
  • Specific operating expenses

Loan terms:

  • 3% fixed interest rate
  • 5-year maximum loan term
  • No prepayment penalty
  • Requires a personal guarantee

Photo credit: Getty Images.

The program has a preapplication loan questionnaire which helps loan reviewers know more about the business’ financial state, owner’s credit and ensure the required documents are completed, she said.

“You have to know what the financial shape is,” she said. “You can’t know where you’re going if you don’t know where you’re at.”

Loan applicants need a credit score of 600 and above, and a soft credit check will be conducted, she said.

“It’s not cookie-cutter,” she said. “It’s going to be a case-by-case scenario.”

The loan application is reviewed by a committee and takes about six weeks to reach a decision, she said.

“We want you to get the funds. We want you to be successful,” Stevenson said. “We want you to be thriving and be able to contribute to the community.”

SCORE

Hackney said business owners can also access advice through retired business owners who volunteer at SCORE, which is a free and confidential service.

SBA and Federal Contracts

Dawnelle Conley, deputy district director of the Iowa SBA, laid out the steps for businesses that interested in working with the federal government, which she said is the largest purchaser in the world. The government allots 23% of its purchasing budget for small businesses.

Conley said business owners must first register online to conduct business with the federal government.

“This is a very important database for you because it’s a national database,” she said. “Contracting officers can search on a local basis, regional basis, national basis . . .”

Businesses can also search the database to learn more about their competitors, she said.

Conley described other programs for businesses, including:

  • The 8(a) business development program, which provides assistance to small, disadvantaged businesses to grow to the next level and build capacity. It’s a nine-year program, which has set aside contracts. For more information visit https://sba.gov, click on federal contracting.
  • HUBZone certification is a program that benefits businesses in underutilized business zones. The benefit is set aside contracts.
  • Women-owned federal contracting program. The benefit is set aside contracts. www.sba.gov/wosbready.
  • Procurement technical assistance centers – receive help with federal and non-federal contracting. Access training and search for contracts.
  • Surety bond guarantee – for small businesses that need a bond but can’t get one.

Conley said all the programs and services are free.

“We are working in a collaborative manner,” she said. “We’re going to refer you to resources that’s not going to charge you.”

Caldwell, of the Directors Council, encouraged Black business owners to subscribe to the group’s newsletter and list their businesses in the Black Iowa Business Directory. Next month’s roundtable will cover business marketing and websites.

Learn more during the SBA's National Small Business Week.

Targeted Small Business Program

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