Southern Bancorp Launches Minority Business Empowerment Program

Southern Bancorp Community Partners (SBCP), a Community Development Financial Institution (CDFI), launched its Minority Business Empowerment Program (MBEP) to provide business technical assistance and funding readiness for minority business owners in five Arkansas counties. Applications for the first cohort of 2024 opened on June 1.

“As a former minority entrepreneur myself, I understand many of the challenges faced by our communities firsthand, as well as the critical need for programs like this to help support small businesses with the building blocks to sustain, succeed, and scale,” said Kenya Davenport, interim president of Southern Bancorp Community Partners.

After the successful pilot version of the program in 2021, the bank’s MBEP was created. During the pilot phase, 29 entrepreneurs in Pulaski County received free technical assistance, with about half receiving loan funding. To date, more than $1 million in financing has been distributed to participating small businesses.

The program will expand upon those efforts with business technical assistance led by industry experts over the course of 12 weeks, including both group learning and one-on-one sessions which center around seven key business disciplines: sales and operations, financial management and accounting, human resources, marketing and communications, management and leadership, business growth strategies and digital technology integration. After completion, participants are more prepared to seek funding to support their business operations, growth and scalability.

“Small businesses are integral to the health and growth of our local communities, but too often, minority-owned businesses are either unable to access financing or receive the tools and resources needed to grow and thrive,” said Darrin Williams, CEO of Southern Bancorp. “This program is an important vessel through which we can help entrepreneurs overcome those barriers to reach their full potential, and in turn create more jobs and opportunities in our communities.”

The five Arkansas counties represented in the MBEP include Pulaski, Saline, Lonoke, Faulkner and White Counties. Qualified applicants outside of these areas in Arkansas and Mississippi will also be considered.

The program is also supported by program partner Simmons Bank, which announced a $1.25 million investment in May to improve the program’s operations and funding abilities. Simmons Bank’s support includes a 10-year, $1 million Equity Equivalent (EQ2) investment and a $250,000 grant to provide technical assistance to participating MBEP businesses.

A recent study by the Brookings Institution found that Black-owned businesses can drive high percentage increases in employment, revenue and payroll figures, but make up less than 3% of the market share nationwide. That 3% translates to about 440 Black-owned businesses in the Little Rock, North Little Rock and Conway metro regions. If that figure increased to 25.4%, equivalent to the Black population of the same area, according to the Brookings Institution, there would be 4,438 more Black-owned businesses. Another possible barrier for entrepreneurs, the Federal Reserve Bank recently reported that only 13% of minority businesses received all the financing they sought during a one-year period during the cooldown of COVID, compared to 35% of white-owned businesses.

“Applicant firms owned by people of color were half as likely as white-owned applicant firms to report that they received all the traditional financing they sought in the 12 months prior to the survey,” the report states. “Specifically, 35% of white-owned applicant firms were fully funded, compared to 19% of Hispanic-owned firms, 16% of Black-owned firms and 15% of Asian-owned firms. Even among firms with good credit scores, firms owned by people of color were less likely than white-owned firms to have received all of the financing for which they applied.”

According to a press release by Southern Bancorp, these kinds of “gaps in the financial world” are prevalent in rural, minority and underserved communities.

Applications for the first of two 2024 MBEP cohorts opened on June 1. For more information or to apply, visit www.mbempowerment.com.

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