Latest / The SmallBizChat with Melinda Emerson / What Do Black Business Owners Need to Know About CDFIs as a Funding Option with Amber Banks

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What Do Black Business Owners Need to Know About CDFIs as a Funding Option with Amber Banks · The SmallBizChat with Melinda Emerson

• 0:00
  Three, two, one, zero.
• 0:04
  Ignition.
• 0:06
  Lift off.
• 0:09
  Ending small business failure.
• 0:11
  Welcome to the Small Biz Chat podcast with the number one small business expert, Melinda
• 0:17
  Emerson.
• 0:18
  Melinda's goal is to end small business failure, and she'll give you the information
• 0:23
  you need to succeed and live the life you dream of.
• 0:26
  Now here's your host, the small biz chat lady herself, Melinda Emerson.
• 0:34
  Have you subscribed to the small biz chat podcast?
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  Well, it's time.
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  Every Wednesday, we offer listeners bite sized actionable tips to start and grow a successful
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  small business.
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  In just twenty minutes or so a week, you can get a ton of insight and resources to propel
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  your business forward.
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  Be sure to subscribe to the Small Bitch Chat podcast today.
• 0:58
  This is Melinda Emerson, the small biz lady, and I'm so excited to welcome you to another
• 1:03
  episode of the Small Biz Chat podcast.
• 1:06
  You know, the mission of Small Biz Chat is to end small business failure, and that's what we
• 1:13
  are all about today.
• 1:14
  I always have guests on the Small Biz Chat podcast that give you advice that otherwise you
• 1:20
  would have to pay for.
• 1:22
  Now listen, if you enjoy the Small Bitch Chat podcast, please do me a favor.
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  Please give us a favorable review on Apple Podcasts or wherever you listen to your
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  favorite podcast.
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  Now listen, if you do not like my podcast, please do not leave me any hate mail.
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  That is not nice.
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  But if you do appreciate what we've done here over the last eight years that I've been doing
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  the Small Bitch Chat podcast, I would really appreciate it if you would leave me a review
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  and share it with others because at the end of the day, most people have good ideas, but
• 1:59
  sometimes y'all struggle with running your business.
• 2:01
  So that's why we're here today, and I am so excited to have our guest with us today.
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  We are gonna be talking to the lovely Amber Banks, and she is president and CEO of the
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  African American Alliance of CDFIs, CDFI CEOs.
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  Amber leads the nation's only organization dedicated to supporting black led community
• 2:29
  development financial institutions, which is what CDFI stands for.
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  They are the trusted lenders that help black entrepreneurs access affordable capital,
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  coaching, financial tools when traditional banks fall short.
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  Now here's a factoid for you guys.
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  Traditional banks turn down 8,000 loans a day in America.
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  So we need other institutions like CDFIs to give us a fighting chance when traditional
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  capital just really is not available.
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  Now through the Alliance, Amber works closely with Black CDFI leaders who are on the front
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  lines of advancing Black ownership and home ownership in underserved communities.
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  And today she's here to talk to us about what black business owners need to know about CDFIs
• 3:18
  as a funding option.
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  Amber, welcome to the Small Bitch Shad podcast.
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  Thank you so much, Melinda, for having me.
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  I'm excited to be here and to have this conversation.
• 3:29
  So I'm definitely looking forward to our talk.
• 3:32
  Well, let's jump into it because I know people are hearing CDFI and some people who listen to
• 3:38
  my podcast have never heard this term before.
• 3:41
  Can you explain to us what CDFIs are and why they were created in the first place?
• 3:48
  Absolutely.
• 3:49
  And you did such a brilliant job on the introduction, so I'll jump in from there.
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  So community development financial institutions are all mission focused lenders.
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  They have a particular service market that they focus on, and their job is to reach the
• 4:02
  underbanked and underserved in their communities.
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  So they really exist to find those in the margins and help support small business owners
• 4:11
  in particular that are not bankable for a number of reasons.
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  And that could be because their time in business is too short.
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  Sometimes banks are looking for established businesses who've been operating for two to
• 4:25
  five years.
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  It could be because they're having credit challenges, bootstrapping the business, which
• 4:31
  is the advice a lot of small business owners get.
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  They leverage their own credit and their own access to capital through their personal credit
• 4:40
  scores as far as it can go before looking for capital.
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  Sometimes that damages the score, that makes things a little harder on the other hand when
• 4:50
  it's time to get that loan or get that line of credit.
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  Also, if they have insufficient collateral.
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  So a lot of small businesses really need working capital, they're renting space, there
• 5:00
  aren't a lot of assets to come to the table for these transactions.
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  So all of these things, one or a combination
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  of them,
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  usually puts small businesses in some sort of jeopardy of obtaining capital from banks, which
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  is why to your earlier comment, about 90% of applications submitted to banks are denied.
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  So these institutions exist to help address those issues, but also address some of the
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  historic discriminatory lending practices that have taken place in our country for some time.
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  So whether that is historical redlining or just structural inequities that have left entire
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  communities locked out of obtaining affordable capital, these organizations exist to change
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  that reality, change that narrative, and they lend where others won't.
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  They invest in areas that have been disinvested, and they ensure that capital flows
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  into communities that have been overlooked sometimes for generations.
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  All right, so let's talk about what this really means.
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  When you're dealing with a traditional bank, traditional banks want credit scores, what, six
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  eighty or higher to even really fool with you.
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  Sometimes I even heard 700, right?
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  So what is it that a CDFI will do?
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  Like if a regular bank wants six eighty to 700 in a credit score minimum, what is a CDFI
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  willing to do to be more palatable to someone who's been bootstrapping, who may have missed a
• 6:36
  mortgage payment or two as a result of that?
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  How does all of that work?
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  So CDFIs, first, they are, not most of them, are non regulated entities.
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  So part of the reason that banks have to, and I'm using that in quotation marks, to be so
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  strict is because they're highly regulated.
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  They have the Federal Reserve, they have OCC, they have the FDIC, ABC one hundred twenty
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  three, they have to report to everybody.
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  And so what that unregulated environment does is it just that the extra responsibility, the
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  fiduciary responsibility that they have to show to those regulators requires them to really
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  manage risk in a very specific and stringent way.
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  Most CDFIs are not regulated, so we have a lot more flexibility in terms of building that
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  credit box, and we can keep community context in mind when designing how we create access to
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  capital.
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  So that CDFI may not have a minimum credit score requirement at all.
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  Those that do, they're going to still take into account the story.
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  They're going to contextualize the data.
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  So they're still looking at a lot of the same numbers.
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  What do you have available to secure that loan?
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  What is your credit history and credit behavior?
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  Do you have some money to put into that transaction?
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  How long you've been in business?
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  But we're going to look at the whole entrepreneur.
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  We're going to take that entire journey and story into account in making decisions.
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  CDFIs would prefer to get to a slow yes rather than a quick So they pair capital.
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  They pair the capital also with technical assistance, training and coaching.
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  So they really are there to build relationship, build trust, and to help get you there.
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  Maybe right size that transaction, find a starting point and make sure that your business
• 8:33
  has the capital and resources it needs to thrive.
• 8:36
  Okay, well, that's interesting because I feel like credit scoring is such a big issue and
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  it's like, I have always felt personally that credit scoring is actually how racism has been
• 8:54
  institutionalized in America.
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  Because it's like the poorest people pay the most for everything and how we manage that, how
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  they pay more for car loans, pay more for rent, pay more to borrow money in any way is through
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  credit scoring.
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  So can we have a candid conversation about credit scoring?
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  Because I just feel like this whole FICA, with FICO scoring is so damaging.
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  I mean, now you've gotten to a point where students struggle to borrow student loan money
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  unless there's a credible cosigner because now the fact that you're going to college to get a
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  degree is not enough of a collateral standard to even get a student loan.
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  So can we have a conversation about credit scoring, please?
• 9:44
  Sure, happy to.
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  I mean, I'm ready to amen everything you've already said.
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  There's certainly a poor tax on access to capital, right?
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  Those who have affordability challenges or perceived affordability challenges, perceived
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  risk, their cost of capital is more, which is incredibly backwards.
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  Your credit score is also a look back.
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  It's history, right?
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  It may not reflect the last year, couple years of your life, and also the opportunity that's
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  ahead of you.
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  And in particular with a lot of entrepreneurs, they took the hit to their credit scores to get
• 10:24
  where they are.
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  They climb, they climb, they climb, and then now they have this contract, they have this
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  opportunity for growth.
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  And it's there, it is viable, is in black and white, it's in paper, but because of that
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  credit history, it can lock them out.
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  And so this is not a new idea, right, to say credit score may not be the end all be all.
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  And there are a lot of models that have emerged to try to step away from that, whether that is
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  looking at payments that are connected to revenue or on a weekly or biweekly basis.
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  Some folks don't even do personal guarantees.
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  If the business is in a good enough shape, they'll bypass that piece altogether because
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  CDFIs in particular that have that pulse on the community know how damaging not just a couple
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  of mistakes can be to your credit, but how it really casts a shadow on your entire process in
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  terms of access to capital.
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  Well, one of the things that I've been exposed to, you know, I have been the small business
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  lady for seventeen years.
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  And so in that amount of time, I've seen a whole lot of businesses in different shapes and
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  sizes.
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  And one of the things that I have been so, I have just been so irritated about is I have
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  seen businesses that are over $1,000,000 in revenue that can't borrow money, that are
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  cashflow positive, that have contracts rolling that can't borrow money because six years ago
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  somebody missed a mortgage payment.
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  Like I've seen that.
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  And I'm just wondering, are those the kinds of opportunities that you guys then kind of step
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  in and support businesses around, or even just short term?
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  I mean, one of the other things that I very commonly see is, so I have a rule of thumb, The
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  bigger the customer, the slower they pay, right?
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  So sometimes you can get into a situation where you're net 60, net 90 waiting on money for work
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  you have done, right?
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  Which means you had to pay people before the money And comes I have seen situations where
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  folks get contracts that they cannot say yes to because they don't have the mobilization money
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  to get it started before they get paid.
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  And there seems to be a real, I don't know if I wanna call it insensitive or do I wanna call it
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  tone deafness around, one of the things that my firm does is we design supplier development
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  programs for major brands and quasi government agencies and cities and stuff like that.
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  And one of the things when I get in the room with them, I say, okay, are you guys serious
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  about this or not?
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  Because we gotta look at payment terms.
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  We have to look at these ogre ish insurance requirements that you guys have.
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  Just some of this stuff that you are not allowing these people to compete based upon
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  what you say the game is.
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  And so I just wanna kinda hear from your standpoint in terms of, because I'm imagining
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  that your organization is an advocacy and lobbying organization as much as it's the
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  parenting organization of all this black CDFIs.
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  And I just wanna know what are you guys doing about this stuff?
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  Because it's just ridiculous.
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  Like somebody doing $2.3000000 in revenue, positive cash flow with a contract sitting in
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  front of them and can't get money.
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  So we don't do lobbying, but we do do a great deal of advocacy work at the federal level and
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  then also state and now regionally since we've begun to shift some of that energy to more
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  state focused advocacy work.
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  That's the first part, right?
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  It's telling those stories and making sure that federal programs are aware of some of those
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  particular challenges that really impede businesses' ability to do business with the
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  government and otherwise, because yes, sixty, ninety days and factoring is not always the
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  solution.
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  It's highly
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  Factoring erodes margin.
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  If you got to give it to somebody else and your margin was only 14% to begin with, now you've
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  done a contract for 4%.
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  That's right.
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  That's right.
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  That's exactly right.
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  And sometimes entrepreneurs are not aware of the dangers of factoring agreements and how
• 15:00
  sometimes predatory they can be.
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  So yes, CDFIs try to stand in the gap.
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  Working capital is so important, whether if you're an accounting firm and you do taxes, if
• 15:12
  you're a trucker, all of these businesses require working capital.
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  If you're a consultant, you're self employed, which many minority owned businesses are, that
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  working capital piece is critical.
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  And so helping businesses to understand that and also being a source of capital.
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  Some CDFIs do do lines of credit to help solve that problem.
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  Right?
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  And then they also do permanent working capital loans, giving you enough money that you can
• 15:39
  recycle internally, but it gives you that runway so you can still pay your employees, you
• 15:44
  can pay your rent, you can meet all of your operating obligations while you're waiting for
• 15:50
  your customers to pay you.
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  But understanding that accounts receivable is so important, and that's where that technical
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  assistance piece can come into play too, is helping entrepreneurs understand that cash flow
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  process and cycle so that we can get you the right structured money that you need.
• 16:09
  All right, so let's talk about this.
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  So if I'm in danger of missing payroll in two weeks, because I'm waiting on a net 60, a net
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  90 payment, can you guys deal with people with urgent cash flow needs or do you guys need more
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  time than that?
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  I would say that many, maybe most of our members would probably need more time than two
• 16:37
  weeks, being But we do have some CDFIs in our network that are highly technology driven and
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  their systems are online and they're incorporating a lot of automation.
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  So there are certainly some that can address those very, very urgent needs for capital.
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  But usually when we start talking about a couple of business days, less than ten, we're
• 17:01
  getting again into more automated decision making.
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  And sometimes incorporating the story and relationship, you're getting more into, does it
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  fit or does it not?
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  So I would say I would encourage folks to identify CDFI in their area, start building
• 17:20
  that relationship, hopefully before we have the urgent need.
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  But if this is the first time you're hearing about what a CDFI is and you're facing an
• 17:29
  urgent need, there are certainly online based CDFIs like Lendistry who really do a great job
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  of blending mission, a balancing mission and access, And so you can get some resources
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  pretty quickly in some cases.
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  I know Everett and those guys.
• 17:48
  Yeah, so it's interesting because I just feel like CDFIs are an unknown gem.
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  People don't realize that CDFs are out here.
• 18:00
  But I've also experienced, so I'm based in Philadelphia, so I've also experienced CDFIs
• 18:04
  that act worse than the bank.
• 18:06
  Ah, really?
• 18:08
  Very, very, very much so.
• 18:11
  Like, they're the last places people wanna go because of the inordinate amount of like very,
• 18:18
  almost like personal drama that people have to deal with.
• 18:21
  And so I really wanna get your feedback around that.
• 18:25
  Is this new information to you?
• 18:28
  Like, am I saying something that you're just like, wow, I never heard that before.
• 18:31
  Or are you aware that all CDFIs, Black ones are not cut the same?
• 18:41
  No, you're absolutely right.
• 18:44
  Because CDFIs, the industry has so much flexibility in how they structure themselves
• 18:50
  and how they put resources into the communities that they serve, it's not cookie cutter, right?
• 18:57
  They do try to build their systems and access points to meet the needs of that particular
• 19:07
  community.
• 19:08
  So yes, I cannot say that all CDFIs are gonna operate the same.
• 19:12
  What I can say is that as an intermediary, what we focus our time on is helping to get them
• 19:19
  additional resources, do capacity building programming, bring best practices to the table,
• 19:26
  develop peer networks so that they can learn from one another, because we want them to
• 19:30
  address these very challenges that you're talking about.
• 19:33
  Customer service is huge, that is the business.
• 19:39
  Sometimes these organizations are trying to do more with less and managing those resources can
• 19:44
  be a difficult challenge.
• 19:46
  We have some situations that will happen where folks are not pleased with the experience that
• 19:51
  they've had, and we want to combat that as an intermediary to help bring in those best
• 19:57
  practices, reduce their procurement costs, help them with talent pipeline, all the things that
• 20:02
  can go into building stronger operations for them so that they can have more of those great
• 20:11
  customer experience stories.
• 20:13
  Can you tell us a little bit about how many black led CDFIs are there in The United States?
• 20:21
  It's really tough to give an exact number because that information used to be tracked,
• 20:27
  but isn't anymore.
• 20:29
  The best that we can tell is that there's maybe about 400, that's our good guess.
• 20:39
  But it also changes.
• 20:40
  We have folks that retire and there isn't always a direct succession plan with that
• 20:46
  particular characteristic in mind.
• 20:49
  You have folks that have career changes and all those types of things.
• 20:53
  Our network has about 130 organizations within it.
• 20:58
  Roughly 90 of them have that CDFI certification from Treasury.
• 21:03
  The other 40 are still in the process of obtaining that certification.
• 21:07
  So we're trying to do the math and pick up sort of where the available data has left off to
• 21:14
  identify where those organizations are, to bring them into the fold and to help to support
• 21:19
  them in their old growth journeys.
• 21:21
  Because they're finding a balance too between growing their balance sheets and their
• 21:27
  organizations, but also remaining incredibly relational in how they do business.
• 21:33
  Where does the money come that funds CDFIs?
• 21:39
  I can speak for
• 21:40
  most of them.
• 21:41
  Again, they have flexibility there too.
• 21:43
  But what tends to happen is that the organization in its nascent stages finds some
• 21:49
  sort of early stage funding where that may be from municipality or from the city to do some
• 21:55
  economic development work.
• 21:56
  And that gets them started.
• 21:58
  They typically will then go from there to maybe apply for one of the programs through the CDFI
• 22:02
  fund that gives them another 150, 200,000 or so seed money essentially.
• 22:09
  But most of them that stable in their operations, they are highly subsidized through
• 22:15
  grants from the philanthropy space.
• 22:19
  They go out and they raise dollars with impact investors to do this work.
• 22:24
  Then the other portion comes from their activities.
• 22:28
  When they do loans, they earn interest, have a margin there that comes from their portfolio
• 22:34
  activity, fees and other things like that that support their earned income.
• 22:39
  But it's usually a combination of those two, largely with grants, but also some of that
• 22:44
  earned income from their portfolios.
• 22:46
  Can you talk to me about technical assistance?
• 22:49
  I know you talked about like in addition to giving loan dollars, if you will, that CDFIs
• 22:56
  are also providing technical assistance.
• 23:00
  Can you describe what that kind of typically looks like?
• 23:04
  Yes.
• 23:05
  Right now, it is gonna be a combination of in person and some online training and
• 23:10
  opportunities, But usually it's gonna focus on a number of different paths, right?
• 23:16
  It could be for startups taking you from idea to business plan to formulation.
• 23:25
  And they could also be on more operational and acumen building things like helping with sales
• 23:33
  strategy, connection to customers, marketing.
• 23:37
  It pretty much spans the gambit.
• 23:40
  And then the format is gonna be different based on organization.
• 23:43
  So again, you might have some on demand opportunities that you can go to their website
• 23:47
  and do some self guided learning, or it could be workshops, cohorts, and one on one technical
• 23:54
  assistance that where they work with you specifically and get into the weeds of your
• 23:58
  business, have some uncomfortable conversations, talk about all those tax write
• 24:03
  offs we did last year.
• 24:08
  It just really getting into the nitty gritty.
• 24:10
  There are options based on where you are and what you're looking for, and they often try to
• 24:15
  be very flexible and understanding to the time demands that entrepreneurs are facing.
• 24:20
  Sometimes these are events at night, after hours.
• 24:25
  I've even seen some programs that focus on women and especially mothers and entrepreneurs
• 24:31
  where they do combination like late night after you've gotten the kids in the bed and you've
• 24:37
  done the dinner routine and homework, now it's time to focus on the business.
• 24:41
  They'll do some late night hours just to help accommodate both schedules.
• 24:45
  So can you tell me a little bit about, let's say I've heard this and I'm like, wow, I didn't
• 24:53
  know CDFIs exist and I want to approach a CDFI for funding for my business.
• 25:00
  Like what types of things do people need to have really before they even pick up the phone
• 25:06
  and try to get an appointment to see someone at a CDFI?
• 25:10
  What do they need to have in place?
• 25:13
  I would say that anytime is a good time, no matter where you are.
• 25:18
  Again, if you're just at ideation and you're like, I don't want to do this alone.
• 25:22
  I don't want to make some of those common expensive mistakes.
• 25:25
  So I want to find a guide now.
• 25:27
  Or whether you're at a point where you have been denied by a bank and let's say you do need
• 25:32
  access to capital and that's the focus.
• 25:34
  I think anytime is a good time.
• 25:35
  You can visit our website at aaacdfi.org.
• 25:41
  We have a directory there that you can filter by state and find a CDFI that serves your area.
• 25:49
  And then I would say, be transparent.
• 25:52
  That's the biggest thing.
• 25:53
  If you can just be honest about where you are and the challenges that you're having, kind of
• 25:58
  take that, I'm doing it all, I got it all covered mask off and have some honest people
• 26:05
  and have those tough conversations.
• 26:06
  Somebody is gonna be able to help you get from A to B.
• 26:09
  We just gotta figure out where A is.
• 26:13
  Figure out where A is.
• 26:18
  We're almost done, but I do wanna ask you, there's so much predatory lending out here.
• 26:27
  There's so much, I mean, I can't even tell you, so I have two businesses.
• 26:36
  I have Quintessence Group and Small Business Lady Enterprises.
• 26:40
  And once or twice a week, I'm getting a text message from someone trying to give me money.
• 26:47
  Hey Melinda, we've seen you've been in business a long time.
• 26:49
  I could do a million dollars for you in the next forty eight hours.
• 26:55
  I just need your paperwork.
• 26:56
  I need to make savings.
• 26:57
  And I don't even know who these people are And that are texting I've been in business over
• 27:04
  twenty five years.
• 27:05
  So I know probably I look less risky, like let's say, than somebody that just started.
• 27:10
  But once a week, I'm getting text messages from one or two potential lenders.
• 27:16
  I get emails constantly from potential lenders.
• 27:20
  And years ago, we actually did a loan.
• 27:26
  We went through Lindeos process and got a loan with a vendor that we thought was a good one.
• 27:34
  What we didn't realize was is that it was basically a variable line of credit.
• 27:39
  So whenever we needed money, we could take money down off of it and we had a monthly
• 27:44
  payment with them.
• 27:45
  They would take it directly from our account.
• 27:47
  What they failed to tell us though, was that whenever we took a download from the loan, they
• 27:55
  added 2% to the loan.
• 27:58
  We didn't know.
• 27:59
  So we looked up and the next thing you know, we got a loan for 42% APR.
• 28:06
  And I was like, I'm the small biz lady and I got played that.
• 28:10
  And so I'm really concerned about all of these, because there's such a gap, because 8,000 loans
• 28:19
  a day get turned down in America, there's all these other people that are now out here
• 28:25
  preying on folks.
• 28:28
  And how do we, as small business owners, as Black business owners, how do we discern
• 28:36
  stranger danger, right?
• 28:37
  Versus, obviously the traditional banks are gonna do what traditional banks do, but all
• 28:44
  alternative lenders are not cut the same.
• 28:48
  How can we make sure if they're not sending you statements so you don't know what the interest
• 28:54
  rate is?
• 28:54
  Or if, you know what I mean?
• 28:56
  There's all this stuff that looks good, but ain't good, right?
• 29:00
  So can you help us all just like kind of understand what are the three questions we
• 29:07
  should be asking of anyone who wants to loan us money?
• 29:12
  Yes, I mean, that's a great question and it really is sad.
• 29:16
  For years, I was working directly with small business owners and similar story to yours, he
• 29:22
  had been getting these online loans to help make payroll because he had working capital
• 29:27
  constraints.
• 29:28
  He was up to 100% interest.
• 29:31
  Wow.
• 29:32
  It terrible. Was
• 29:33
  Was The saddest part is when we saw a lot of folks that were coming in the door to try and
• 29:40
  get refinanced out of these terrible contracts, 80% of the time when I would ask, If you could
• 29:47
  go back and do this again, would you?
• 29:49
  They would say, Yes, because it saved my business in the moment.
• 29:53
  That just speaks to how critical timing and access to capital can be.
• 29:58
  I would say, if there are three things that you're going to ask, one would be if you're
• 30:04
  going to go the online route, which I don't necessarily recommend, but if you're going to
• 30:09
  go the online route, is to do that research.
• 30:14
  Sometimes those customer reviews, those independent customer reviews can really help.
• 30:20
  And sometimes you're not even talking to a person.
• 30:22
  So that's why I'm trying to structure this and here's what you can do versus if you're not
• 30:26
  even speaking to a person directly where you can ask, but ask about the terms, not just the
• 30:33
  interest rate, but also fees, right?
• 30:35
  Because sometimes they're hiding the true cost and the fees that are attached to that.
• 30:39
  Credit card companies are doing this too on the consumer side.
• 30:42
  They're, you know, We'll give you six months to pay it off and here's just a fee, but you gotta
• 30:48
  do the math to understand what that rate actually is.
• 30:51
  So understand those terms.
• 30:52
  If you can talk with someone and say, I need to know all the fees associated with this.
• 30:56
  I need to know what my APR, my annual percentage rate is.
• 31:02
  I would also ask, what is the penalty for early repayment?
• 31:07
  Maybe you are in a bind and you're going to take it now because payroll has to go out in
• 31:12
  two days, what happens if I prepay this early?
• 31:16
  Is there a penalty involved in that?
• 31:18
  That's another question that you wanna ask.
• 31:21
  And then make sure that you ask about what happens for extensions.
• 31:30
  If I run into payment problems, I can't make a payment this month, need to skip this week,
• 31:37
  what are the additional penalties for extension and payment?
• 31:40
  Because a lot of times that's a part of the trap.
• 31:43
  They give you the money, but that monthly payment, that weekly payment sometimes is so
• 31:48
  high that it's just gonna put you in another cash flow bind.
• 31:52
  So what happens if I can't make a payment?
• 31:54
  What's my penalty?
• 31:55
  What happens if I try to get out of this early before my terms and is there a penalty there?
• 31:59
  And then I want to understand fully for the term of this loan, what my fees and interest
• 32:05
  rates are for my total cost of borrowing money.
• 32:09
  Now, one of the things that I always advise my small business clients is don't get into daily
• 32:16
  or weekly repayment.
• 32:18
  Like if they won't do a monthly repayment with you, don't do it because you're basically,
• 32:22
  they're gonna end up taking your cashflow.
• 32:24
  You had a cashflow problem and now these people are gonna become your cashflow problem.
• 32:28
  So if they won't negotiate a monthly payment with you, it's a no.
• 32:35
  Daily repayment, weekly repayment is nothing that's gonna be good for you and your cashflow,
• 32:42
  especially if you don't get paid like that from your client.
• 32:45
  You are a service based business.
• 32:47
  You should not be in daily or weekly repayments with anyone,
• 32:52
  think.
• 32:52
  And I to recognize your power as a borrower.
• 32:56
  They want your business.
• 32:59
  Stand in that power a little bit.
• 33:01
  Taking your advice about having some standards around what you will and won't do is a great
• 33:06
  suggestion, and just be willing to walk away and say, No, understand the leverage that you
• 33:10
  have.
• 33:12
  Yeah, I agree with that anymore.
• 33:17
  And looking ahead, what would you say is the best business advice you could give to small
• 33:28
  business owners, black small business owners out here right now?
• 33:31
  What should they be thinking about in this 2026?
• 33:36
  We're in the early stages of 2026.
• 33:38
  What should they be thinking about and looking at?
• 33:41
  I would say they should be looking at growth opportunities.
• 33:48
  A lot of times we get into that trap of wanting to be superman, superwoman, do it all, know it
• 33:53
  all, but really there is power in hiring to your weaknesses and building a team.
• 34:01
  Some of the best advice that I ever got indirectly from Tina Fey was a sign of great
• 34:08
  leaders or folks that know how to hire the right people, the best people, and then get out
• 34:13
  of their way.
• 34:15
  Know what you do well and do it well, but hire to your weakness, build a team because when we
• 34:22
  try to do it all, we make mistakes, we miss things, we miss deadlines, customers suffer.
• 34:28
  Our entire business model can suffer from us thinking that we can do it, but truly build a
• 34:35
  team is the best advice I could give.
• 34:38
  Great, great stuff.
• 34:39
  Well, listen, thank you so much, Amber Banks for being my guest today on Small Biz Chat.
• 34:47
  I feel like I'm Columbo.
• 34:48
  I got one more question for you.
• 34:50
  So do CDFIs lend money for people to buy businesses or franchises?
• 34:57
  They do, they do.
• 34:59
  And a lot of them had worked with the Small Business Administration and their seven
• 35:03
  program, or some of them do five zero four as well, but yes.
• 35:07
  So you can visit a CDFI if you're thinking about franchising or acquisition.
• 35:13
  They have some specific guidelines in terms of how you evaluate and place value on that
• 35:19
  business and things like that.
• 35:21
  But yes, absolutely.
• 35:22
  We know that right now, especially with that transition, a lot of baby boomers are leaving
• 35:26
  the space and the kids don't want the business, right?
• 35:29
  So it's a huge opportunity, especially for black entrepreneurs to get in this space,
• 35:34
  something that's established, cash flow, think about that acquisition, talk to a local CDFI
• 35:39
  about options.
• 35:41
  Awesome, awesome.
• 35:42
  Thank you so much, Amber.
• 35:45
  Your information has been really, really enlightening.
• 35:48
  I think that my loyal listeners are gonna learn a lot from you.
• 35:52
  And again, if you want some information to find a CDFI in your community, go to aaacdfi.org and
• 36:00
  you can find a CDFI near you.
• 36:05
  All right, thank you so much.
• 36:07
  And listen, thank you so much for being with us on another episode of the Small Biz Chat
• 36:13
  podcast.
• 36:13
  I'm Melinda Emerson, Small Biz Lady, your host.
• 36:16
  And I just leave you with this.
• 36:18
  If you are a business owner looking for support with your business, particularly in sales, head
• 36:24
  over to smallbizladyuniversity.com.
• 36:27
  We are about to open a new cohort of our Sales Accelerator Boot Camp.
• 36:31
  So you don't have a revenue problem, you got a sales process problem and we wanna help you fix
• 36:35
  it.
• 36:36
  So again, head over to smallbizladyuniversity.com.
• 36:41
  And I just want to leave you all with this as I always do, you never lose in business, either
• 36:47
  you win or you learn.
• 36:49
  God bless everybody.
• 36:55
  Thanks for listening to the Small Biz Chat podcast with Melinda Emerson.
• 37:00
  Subscribe to this podcast wherever you listen to podcasts, and join us next Wednesday for
• 37:05
  more fantastic information and interviews.
• 37:08
  You can find more sources and small business success strategies by visiting Melinda's
• 37:12
  website, succeedasyourownboss.com.
• 37:16
  Thanks again for listening, and we'll see you next week.