Updated: Apr 25, 2021
This month’s Level Up session is all about being “Bankable.” Bankable is a financial term used when a business is sufficiently healthy to access capital from lenders. It is a basic indicator of a company’s financial and management success and its ability to pay the principal and interest back to the lender. If a bank is willing to loan a business cash and/or support a business, then the risk of the business failing or not repaying the loan is low. Having access to capital enables a business to start up, scale up, or maintain operations. According to the Atlanta and Cleveland Feds report on minority-owned small businesses based on findings from the 2016 Small Business Credit Survey, Black-owned firms report more credit availability challenges or difficulties obtaining funds for expansion than non-minority-owned firms – even among firms with revenues of more than $1M. The report further states, Black-owned firm application rates for new funding are 10 percentage points higher than white-owned firms, but their approval rates are 19 percentage points lower. The report had several other alarming statistics which further proves a broken system. The deck is stacked against Black-owned firms, however, there are strategies for businesses to become bankable.
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