During the recent virtual Black Founders Summit sponsored by Little Rock-based ReMix Ideas Inc. on Oct. 22, local serial entrepreneurial promoter Benito Lubazibwa announced two “first-of-its-kind” venture funds for black-owned small businesses, startups, and sole proprietors that have been unable to access COVID-19 funding at the state, local and federal level.
As CEO of ReMix Ideas and founder of the fall summit, Lubazibwa was able to bring together over 100 business leaders, financiers, policymakers, entrepreneurs, educators, artisans, and other vital stakeholders across Arkansas – all with a common goal: advancing Black entrepreneurship.
During this one-day event attended by Little Rock Mayor Frank Scott Jr. and Southern Bancorp and CEO Darrin Williams, ReMix Ideasannounced two “first-of-its-kind” venture funds for black-owned small businesses, startups, and sole proprietors that have been unable access COVID-19 funding at the state, local and federal level.
Williams, the black CEO at Southern Bancorp who lost a bid to be the state’s first House Speaker for the Arkansas General Assembly, unveiled the Little Rock Minority Business Empowerment Fund established to provide capital to Black and Brown businesses – south of I-630 – in the city. Both Southern Bancorp and Simmons Bank have each pledged $1 million with hopes to enlist commitments from other financial institutions. Altogether, more than $3 million has been raise to date.
In addition, as the founder of the Black Founders Summit, Lubazibwa announced the launch of the Advancing Black Entrepreneurship Fund – a ReMix Ideas initiative in partnership with the Urban League of Arkansas. That capital fund has committed- to raise and award $1 million dollars to Black entrepreneurs by November 2021.
According to a report by the Center for Responsible Lending (CRL), the Small Business Administration’s Paycheck Protection Program (PPP) has failed to fairly serve businesses owned by people of color, causing spill-over harms throughout communities of color, states, and regions. Even though businesses owned by people color are a substantial source of income and employment — accounting for more than 8.7 million jobs at total annual payroll of $280 billion and $1.3 trillion in revenue – many were excluded from the first round of funding in the PPP, said the Durham, N.C.-based nonprofit advocacy group.
Under the Coronavirus Aid, Relief and Economic Security (CARES) Act approved by Congress on March 27, CRL and other critics of the PPP fund said the centerpiece relief program for the Trump administration’s $2.2 trillion COVID-19 relief effort has not helped minorities and other underserved business owners. Also, a recent SBA Inspector General’s report said found that thousands of mom-and-pop smalls businesses that received small PPP loans or were turned down are still struggling to stay afloat, particularly sole proprietors, entrepreneurs, gig employers, and businesses owned by minorities.
“The scarcity of funding relative to the demand strongly favored relatively well-connected, well-resourced businesses with existing commercial lending relationships with a bank or credit union,” Ashley Harrington, CRL’s director of federal advocacy and senior council, said in a recent statement. “These entities were able to get their application accepted and processed quickly to claim their share while the funding lasted. This strongly disfavored businesses owners of color, who generally do not have these relationships and access.
“Moreover, the program incentivizes lenders to favor larger loans, which yield larger fees, and these require payrolls larger than those of the vast majority of businesses of color,” continued the progressive advocacy group with two other offices in Washington, D.C., and Oakland, Calif. “This first-come, first-served model privileges businesses and financial institutions that have more resources and are better prepared to move. Even though some changes were made during the second round of the PPP, much more must be done to ensure essential relief reaches small businesses owned by people of color.”
During the Black Founders virtual summit hosted at the Little Rock Technology Park in late October, ReMix Ideas CEO Benito Lubazibwa, brought together over 100 black-owned businesses, entrepreneurs, policymakers and local and state government officials to support black businesses that have been negatively impacted COVID-19.
During the two-hour zoom call, which included a “call to action” by Little Rock Mayor Frank Scott Jr., Southern Bancorp CEO Darrin Williams announced the state’s first multi-million-dollar venture fund for black-and Hispanic-owned businesses and investors. Williams, who appeared with President Donald Trump and other administration officials during a virtual call in April to discuss the PPP fund, stressed Southern will be the manager and facilitator of the fund with hopes to raise $5 million after it launches. Already, Southern and Pine Bluff-based Simmons First Bank have seeded the fund with $1 million each, raising $2 million to kick-start fundraising efforts.
Williams he has already gained additional support in the nonprofit sector from the Arkansas Community Foundation. He said he has reached out to several for-profit businesses and the local banking community to support the venture fund, which will provide microloans for early stage black-owned businesses, startups and sole proprietors south of I-630 and east of I-30. Further details of the fund will be released later, he said.
“I hope the community will come together to support this fund,” said Williams. “This is capital that is going to be make available mostly to Black and Brown small businesses to really help them get a good footing. Our hope is as these businesses grow and develop …, they can graduate from our fund and go to a traditional bank and access credit and capital.”
Founded in the 1986 by then Gov. Bill Clinton, Walmart Chairman Rob Walton, the Winthrop Rockefeller Foundation, former Systematics Inc. Founder Walter Smiley and others concerned about the economic decline of rural Arkansas and communities of color, Southern Bancorp is Arkansas’ largest Community Development Financial Institution, or CDFI. Through the U.S. Treasury Department, the Trump administration has made more than $10 billion available to CDFIs to serve distressed and minority communities during the pandemic.
‘We were founded with a racial equity lens way back then (in the 1980s). Our founders were visionaries in many ways in recognizing that communities that didn’t have access to capital and investments supported by a community bank or local capital provider are not going to be sustainable and help move families from poverty in the Delta to prosperity,” said Williams told The Daily Record.
At that same summit, Remix Ideas and the Little Rock-based Urban League of Arkansas also announced the formation of the Advancing Black Entrepreneurship Fundto raise and award $1 million to Black-owned businesses by November 2021.
Lubazibwa told The Daily Record that fundraising efforts by Remix Ideas, a for-profit entrepreneurial service organization for black and women-owned startups, said fundraising efforts are already underway to help black entrepreneurs “scale-up” their businesses with microloans, technical assistance, and other important financial tools.
“As you know, one of the toughest barriers for black-owned businesses is access to capital,” said Lubazibwa, who is also the founder the Little Rock’s Africa Day Festival, ShopBlackLive virtual platform, and the Little Rock Night Market. “What we are doing is building runways for Black entrepreneurs to thrive during this pandemic and beyond through unconventional solutions and methods.”
More recently, Lubazibwa has released the “Advancing Black Entrepreneurship in Arkansas” from the fall summit. That report makes key recommendations to local, state, and federal government leaders to further support black-owned businesses and entrepreneurs. Those key recommendations will focus on equity in purchasing and procurement, access to capital, strengthening the arts & the creative economy, supporting Historically Black Colleges & Universities (HBCUs), and building a more equitable and just entrepreneurial ecosystem.
Additionally, ReMix Ideas soon plan to begin a campaign to reach out to city and municipal leaders across the state and encourage them to adopt parts or all of the recommendations in the Black Founders Summit report. To view that report and learn more about the Little Rock-based Black Founders Summit, click here
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