Launching a new business is not for the faint of heart. I think a lot of future entrepreneurs go into the venture with starry eyes as the excitement of pursuing your passion blurs reality. I know it did for me.
With so much to contemplate and put in order, one of the most overwhelming elements of running my own business was navigating the world of finances. There are countless banking options, complex terms and a constant barrage of information. For a long time, I hadn't even considered local banks as a possibility as it is tough to ignore the machines that are mega banks.
What quickly changed that perspective for me was when I had the opportunity to enroll in Local First Arizona’s We Rise Business Accelerator.
Designed specifically for Black small business owners, the program provided me with countless resources and connections to industry experts, but one of the most important lessons was the value of building a relationship with a financial institution.
Why this emphasis? Statistics paint a clear picture for Black business owners specifically. A 2022 survey by Gusto revealed that only 6% of Black new business owners receive the loans they seek from traditional banks. However, graduates from the We Rise program who choose to work with local financial institutions boast a 36% loan approval rate. This is a stark difference, and it highlights the potential that local banks hold for fostering success, particularly within marginalized communities.
With this localized support, it wasn't just about numbers on a page. One of the volunteer instructors for We Rise, Mohammed Ahmad, who also works for Arizona Financial Credit Union, sat down with me, had a conversation, and explored options together. He understood my vision, my capabilities, and the potential of my businesses – Vibe Spot, an event venue, and Pink Sky Productions, a photo booth rental company.
When the time came to expand Pink Sky Productions by purchasing a van, I knew I had a champion in my corner. Now, I understood the process of securing a loan, but more than that, I knew a real person I could count on, beyond this transaction, to be there as I continued to expand my businesses.
What this experience also taught me is the power we all hold with our choice of banks.
Seek partners who will champion your growth
I learned that by keeping our deposits here locally, money can be prioritized toward small businesses like mine to keep money circulating in our community. As it stands today, the bulk of Arizona’s deposits – more than $80 billion – sit in out-of-state banks. And since Arizona is made up of about 99% of small businesses who employ 40% of the workforce, finding ways to keep even a portion of that $80 billion here would go a long way to support local economies further.
Beyond the level of service, the personalized attention, the genuine partnership – I sleep better knowing that depositing my hard-earned dollars locally may help another startup get the loan they need creating a ripple effect that strengthens our entire economic ecosystem.
I urge all entrepreneurs, especially Black business owners, to explore the resources available to them. Seek out partners who will invest in you, educate you, and become champions for your growth. And in turn, pay that forward to others you know need that hand up when starting their own small business journey, as others did for me.
Let's empower our communities, break down systemic barriers around financing, and unlock the potential of local financial institutions to help all independently owned-businesses reach new heights. Together, we can rewrite the narrative and build a financial future that benefits everyone.
Jessica Baker is the owner and founder of Vibe Spot and Pink Sky Productions in Phoenix and a graduate of Local First Arizona’s We Rise Business Accelerator.
