CUToday.info | 8/25/22
ST. PETE BEACH, Fla.–Especially for minority communities, it’s critical for credit unions to help create and prepare for generational wealth, according to one person.
But how to do that? One strategy is to provide help, guidance and solutions for entrepreneurship and business ownership, according to Melva McKay-Bass, SVP, chief business development officer with Suncoast Credit Union in Tampa.
What’s especially critical to understand, noted McKay-Bass, is how not a lot of capital can go a long way.
In remarks to the African American Credit Union Coalition annual meeting, McKay-Bass said the data make clear that Black and Hispanic families have just 25 cents of generational wealth for every dollar held by the average white family. She said business ownership can “bridge that gap.”
Sounds Easy, But…
“It’s so easy to tell members to save for a rainy day, to invest, contribute to an IRA, have the right insurance and more,” McKay-Bass said. “But when you can barely meet your minimum obligations, that’s tough to do,” she added.
McKay-Bass noted half of all businesses are started for less than $50,000, and one third of all small businesses require less than $5,000 in capital. “It doesn’t sound like a lot of money, but it’s a lot of money if you don’t have it,” she said.
Suncoast CU, which is the largest CDFI credit union in the country, has a microloan program—$500 to $50,000 for small and micro-businesses. Helping businesses, especially those owned by people of color, and then arming them with the tolls needed to be a successful business “is how you move the needle one member at a time. As credit unions, we have to be here when the banks turn their backs on these members.”
Be the Difference
McKay-Bass encouraged credit unions to “be the difference.” To that end, she recommended credit unions:
Build a plan and execution strategy
Collaborate with like-minded partners. “Don’t’ try to do it by yourself. It is a good idea to align with agencies that can provide wrap-around services. They need coaching and mentorship to understand the nuances of running the business. Even as they grow to the next level they will still need coaching. Do that and they will stay with you for life.”
McKay-Bass outlined a number of organizations in Tampa with which Suncoast is aligned that she said are available in other markets that provide a variety of different types of assistance to small business owners.
Stay true to the credit union mission. “Many of these won’t make money upfront.”
Have managerial courage.
Be proactive when working with members.
Suncoast has a Business Innovation and Solutions Center available in its home office in Tampa, and is also building another in Fort Myers. Both offer various resources to small businesses.
Published article available here.