The following sections describe the challenges presented by businesses and creative solutions implemented by some national banks to address minority business needs in these three areas. As with all businesses, minority entrepreneurs need access to banking services to successfully manage their firms. While these businesses may struggle with banking access, they are also poised to take advantage of strategic business opportunities untapped by other competitors. Banks have created profitable alliances by developing account officer relationships with owners and business groups, creating partnerships with community-based business development organizations, and implementing targeted outreach programs. Barriers to Loan Approvals.
Information gaps can present formidable barriers to minority small business owners.
They report encountering loan officers who do not clearly explain the information or credit criteria required to approve loan requests or do not thoroughly explain the reasons an application is declined. As a result, many minority small business owners cannot adequately develop businesses plans or loan proposals to obtain financing. Bankers can systematically provide information on the benefits and limits of various types of credit and deposit accounts they offer and on the terms and obligations of each. Some lenders provide written materials in the predominant languages of communities they serve. Institutions that provide more complete information on the documentation required to apply for a loan, for instance, and on the credit criteria they use, will likely increase the number of loan applications received from minority small businesses and decrease the time loan officers spend on incomplete applications.