The kitchen at the Boricua Soul restaurant in Durham, North Carolina, was preparing for her lunch. A gigantic pot of yellow rice and pigeon peas was on the stove. Warmed green cabbage nearby. The place is known for its mix of Puerto Rican and Southern soul food.
Owner Toriano Fredericks said he was proud of how this establishment was able to survive the pandemic and stay open. It didn’t look good at first, since Boricua Soul only opened a few months before everything closed.
“When we first came back, it was just myself here doing the pavement until I couldn’t do it anymore,” he said.
Then his wife, Serena, and son, Devin, came to help.
Fredericks said he got a $19,000 loan under the Paycheck Protection Program. Plus, thanks to community donations and a landlord who hasn’t charged rent for a while, the restaurant is still there. But Fredericks said he needed stronger funding to grow and prosper.
“The most important thing for us is to put these systems in place where we can be successful, find the right people and hook them up. Customers are there for us now,” he said.
Fredericks said he would need a business loan to expand. And from his downtown Durham establishment, he can practically walk to Mechanics and Farmers Bank, or M&Fas we know.
M&F fair received $76 million from the U.S. Treasury Department to provide loans to support small businesses in underserved areas and communities of color. This is part of the department’s $9 billion Emergency Capital Investment Program, which was put in place during the pandemic. One of the program’s goals is to extend business banking services to underserved communities.
James Sills, CEO of M&F, called money a game changer for his institution.
“Having that capital – because it’s really the fuel for growth – it’s actually going to position our bank to be a much bigger bank over time. It’s really exciting,” Sills said.
M&F is one of the oldest Black-owned banks in the country. Sills said his bank had big plans for the money it received, which more than doubles its current capital.
“This capital therefore allows us to develop in the markets where we are established. This allows us to do more loans statewide. It allows us to invest in technology and it allows us to do more marketing,” he said.
It’s the kind of money that can make a big difference for black entrepreneurs.
“It’s transformative in the sense that these institutions, these minority-serving institutions, have never seen this kind of capital,” said Henry McKoy, who directs the entrepreneurship program at North Carolina Central University’s School of Business.
This big pot of funding looks good on paper, he said, but are the banks willing to take risks on their communities?
“Banks, for the most part, are not designed to take risks. So there are a lot of complexities that make it difficult to deploy that money in the black community,” he said.
A lot can be done with a transformative grant like this, McKoy said. Banks can help create affordable housing or business development ventures. But with the economic system’s long history against communities of color, he said, that money can only go so far.
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