Throughout history, Black business owners have struggled to gain access to capital. This is one of the main reasons for the disparity in small business ownership between the races. But in the late 1950s, a group of Black small business owners came together to try to close the gap.
According to Fortune magazine, Black America spent $1.2 trillion in 2018. And with all that spending, most of our Black banks are closed, and our stake in business ownership is extremely low.
Izola’s Soul Food restaurant opened on the South Side of Chicago in 1957. Black people considered it a safe space to gather, and business owners who had grown frustrated with being denied access to capital decided to come up with a solution of their own. My dad used to tell me about Black business owners like Joseph Caldwell (Talorite Cleaners) and Ahmed A. Rayner (A.A. Rayner and Son’s Funeral Home), who would meet at Izola’s to discuss how they could help each other.
Their story is one of amazing trust and support. If a business needed money, the group gave what they could. They loaned money out of their collective, rather than let a business fail due to lack of capital.
These business owners didn’t put the faith of the businesses that provided for their families in the hands of others who didn’t acknowledge them as people. They supported each other, and their businesses grew as a result. As the group expanded, they added more people with financial expertise. They walked door to door with their vision and raised $1 million to establish a federal bank charter. And in 1965, Seaway Bank opened in a storefront at 8555 S. Cottage Grove. Its presence meant the deposits, loans, and community outreach was now being done for Black people by Black people! By December 31, 2014, Seaway Bank had $420 million in assets and 250 employees. So why do we still have Black-owned small businesses closing due to lack of capital today? I believe our false sense of inclusion and the strange need to trust other races more than our own has made us send our money out of our community. It saddens me to think that we didn’t carry the torch of the previous generation. What made us lose the drive to secure our proper position?
According to Fortune magazine, Black America spent $1.2 trillion in 2018. And with all that spending, most of our Black banks are closed, and our stake in business ownership is extremely low. That $1.2 trillion was spent in other communities and drove revenue for non-Black owned banks. So where do we go from here? In 2020 we have access to information and the ability to connect with others without leaving our homes. Why aren’t we connecting to find a solution? We discuss what’s wrong with the banking system, but why aren’t we working to charter a bank? I understand that it’s a huge task, but what are the ramifications if we don’t make an effort?
When most people think of banks, we think of deposits and loans. That is part of the foundation, but there is so much more. Think of a bank like the human body. Consumer deposits and loans are the muscles, wealth management is the bones, and institutional assets and lending is the blood. The solution is not to charter several different banks, but to create a bank to compete with the big 3, and win. After all, we spent $1.2 trillion in 2018.
We use so much energy pointing out the discrimination we face, rather than following in the footsteps of generations before us. Did inclusion help or hinder Black America? And has our desire to be accepted by white America diminished our tenacity to grow Black wealth? Rather than think about these questions as individuals, it’s time we start thinking about them as a collective.
TWO QUESTIONS:
Did inclusion help or hinder Black America? Has our desire to be accepted by white America diminished our tenacity to grow black wealth?
Don’t think about this question as an individual think about the collective…