In an effort to level the playing field for Black-owned small businesses, the Opportunity Finance Network (OFN), recently launched a service that makes it easier to comparison shop for the best loans.
Miti Sathe, the senior vice president of Small Business Initiatives at OFN, said that small business owners can go to Venturize.org, answer a few questions like loan amount, age of business and personal credit score and, in less than 15 seconds, the calculator will generate a range of loan options.
Sathe said that OFN, a national network of community development financial institutions, wanted to create a tool similar to the travel website Expedia.com, but for small business lending.
Venturize.org features tutorials on borrowing, a loan application checklist and establishing credit for your business, but the service does not lend money or recommend loans.
Minorities own about 8 million small businesses in the United States. The Wall Street Journal reported that, Black-owned businesses have received less than 2 percent of loan money furnished through the Small Business Administration, down nearly 6 percent (5.7 percent) since the recession.
As small business owners increasingly turn to online lenders to keep their businesses afloat, a recent Treasury Department report found that, some of those products were “developed in a period of very low interest rates [and] declining unemployment,” economic conditions that may contribute to lower default rates in the industry, but ultimately don’t shed light on how the companies would respond during a financial decline.
“Some online marketplace lenders are accepting applications without FICO scores or with short credit histories and making credit decisions based on the applicant’s college, school, and current income,” the report said.
In a press statement about Venturize, Sathe said that in the unregulated online lending marketplace, the odds are stacked against women entrepreneurs and small business owners of color.
“These small business owners have historically faced barriers to securing lending capital and are disproportionately impacted by predatory online loans that can have devastating effects,” said Sathe. “Venturize was created to ensure small business owners across the country can find fair and affordable loans from responsible lenders that will help them keep their doors open, the lights on, and their customers happy.”
The Sam’s Club Giving Program’s Small Business Economic Mobility initiative provided $3.6 million to fund Venturize.
In a press release about Venturize.org, Julie Gehrki, the senior director of the Walmart Foundation, which oversees the Sam’s Club Giving Program, said that the new loan comparison tool will be an important resource for small business owners as they navigate the borrowing process.
“Sam’s Club Giving’s Small Business Economic Mobility initiative, a five-year investment in small business growth through increased access to capital and borrower education, is committed to investing in user-friendly tools and resources that meet the needs of our nation’s small business owners,” said Gehrki.
Sathe said that OFN plans to promote the Venturize.org social media platforms like Facebook and Twitter and traditional ad campaigns, and added that she is looking forward to working with Venturize.org to reach small business owners, especially the African American small business community.
“Oftentimes, there haven’t been enough tools targeted to that community,” said Sathe. “I’m just really excited for people to start using the tool.”