How One Bank Aims to Boost Minority-Owned Business Financing

Michigan-based First Independence Bank has established a partnership with fintech firm Lendistry to enhance services for underserved small businesses.

Supported by the National Bankers Association’s (NBA) Innovation Council, the partnership aims to provide “a more flexible alternative” for financing for women-owned and minority-owned businesses, as well as small businesses in low-income areas.

“First Independence Bank knows the importance of having sound, strategic partnerships that mutually benefit the respective customers we serve, and do so more broadly through this newly established effort with Lendistry,” said Dimitrius Hutcherson, the bank’s chief administrative officer and chief technology officer.

Everett Sands, Lendistry’s CEO, added: “Capital that is not only accessible but also responsible is a game changer for individual small businesses and for the entire business ecosystem. First Independence Bank shares Lendistry’s vision of filling gaps in capital access so new businesses can grow, create jobs and innovate for their communities.”

In a press release announcing the partnership, the NBA highlighted that business ownership in the Black community increased by 30% in 2021 compared to pre-pandemic levels, according to research by the University of California.

However, in the same year, 38% of new businesses failed because they ran out of capital, according to CBInsights.

The new partnership demonstrates “a clear path forward” for small business financing, the NBA said, through tie-ups between community development financial institutions and minority depository institutions.

Lendistry joined the NBA’s Innovation Council in October 2022 when the council was launched at the association’s 95th Anniversary Conference.

NBA president Nicole Elam said: “Building strong minority-owned small businesses and eliminating the racial wealth gap is central to the partnership between Lendistry and First Independence Bank. We’re eager to facilitate similar partnerships with Lendistry and other minority banks nationwide.”

Separately, New York-based digital bank Quontic Bank has partnered with fintech Spiral to launch a digital “community impact center”. This online portal is designed to demonstrate the bank’s philanthropic activities and positive impacts and allow users to clear monitor its work.

“Transparency is a key component of our mission, and our new Impact Center will enable us to showcase our community impact efforts and drive positive change on a larger scale by making an impact on our community and nationwide,” said Quontic president Robert Russell.