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Best Black-Owned Banks For Small Businesses
Access to capital is critical for the success of small businesses, particularly those owned by people of color. However, systemic racism and discriminatory lending practices have historically made it challenging for Black entrepreneurs to secure financing from mainstream banks.
Fortunately, there are several Black-owned banks and credit unions that prioritize lending to small businesses and have a strong track record of supporting underrepresented communities.
In this blog, we highlight some of the best Black-owned banks for small businesses, their lending criteria, and the types of financing they offer. Whether you are a Black entrepreneur looking for funding or a small business owner interested in supporting Minority-owned financial institutions, this blog will provide valuable insights and resources.
Key Takeaways
- Black-owned banks are banks with a majority Black shareholders
- Black-owned banks are very important to Black-owned businesses since the latter faces discrimination from traditional funding sources
- OneUnited Bank is the largest and a leading Black-owned bank
Disclaimer
The contents of this article are for educational purposes only. They are not intended to be a source of professional financial advice. You will find experts on financial planning, financial management, and real estate here. More on disclaimers here.
What is a Black-owned Bank?
A Black-owned bank is a for-profit banking institution whereby a larger majority of the members of the board of directors or stockholders are African American. Black-owned banks mainly serve people within the Black community, but that doesn’t mean that people of other communities that aren’t Black can’t bank there. As a way of showing support for Black-owned banks, companies like Netflix began making deposits in Black-owned banks.
Why Are Black-Owned Banks Important?
Due to systemic racism, people in the Black community have in the past faced challenges when it comes to accessing financial institutions. Black-owned banks exist to lessen the issues that Black people face when it comes to the mainstream banking system. Black-owned banks help Black-led businesses reach their goals by providing them with access to funds to grow their businesses. They also help people within the Black community get easier access to capital overall.
What is the Largest Black-owned Bank?
The largest Black-owned bank in the United States is currently OneUnited Bank. OneUnited Bank was formed in 2002 through the merger of Boston Bank of Commerce and Founders National Bank. It is headquartered in Boston, Massachusetts, and has branches in California, Florida, and Georgia.
As of 2021, OneUnited Bank has over $650 million in assets and is the first Black-owned internet bank in the country. The bank offers a range of financial products and services, including checking and savings accounts, loans, mortgages, and investment services. OneUnited Bank is committed to supporting the Black community and investing in underserved neighborhoods, with a particular focus on financial education and empowerment.
Is Chime a Black-owned Bank?
No, Chime is not a Black-owned bank. Chime is a financial technology company that offers mobile banking services and does not have a physical branch network. Chime was founded in 2013 and is headquartered in San Francisco, California. While Chime has been recognized for its commitment to financial inclusion and serving underbanked communities, it is not a Black-owned bank. The company has raised significant funding from venture capital firms and has partnerships with several traditional banks to provide its banking services to customers.
Best Black-Owned Banks for Small Businesses
This list does not consider other Black-owned financial institutions including credit unions such as Andrews Federal Credit Union that offer high-interest deposit accounts and other institutions that offer services such as money market accounts.
1. Broadway Federal Bank
Broadway Federal Bank is a community-based bank that was established in 1946 and is based in Los Angeles. Founded by a group of African American businessmen, Broadway Federal Bank has a long history of providing financial services to underrepresented communities, with a focus on promoting economic empowerment and community development.
Broadway Federal Bank is a community-focused institution that offers a range of banking services, including personal and business banking, loans, and online banking. Broadway Federal Bank is committed to serving the needs of its clients, and has a strong track record of supporting local businesses and individuals.
On April 1st 2021, City First Bank merged with Broadway Federal Bank to become the largest Black-led Minority Depository Institution (MDI) in the US. The bank has over $1B total in assets and over $700M in total deposits. It is the aim of the bank to use finance as a force for good. Among the services offered by the bank include checking, savings, electronic banking etc.
2. Carver Federal Savings Bank
Carver Federal Savings Bank is a Black-owned bank that was established in 1948 to serve African-American communities that had limited access to financial services. Today, the bank is among the biggest Black-owned banks that operate in the US. It has its headquarters in Harlem, New York.
Carver Bank Carver Bank has been designated by the U.S. Treasury Department as a Community Development Financial Institutions (CDFI) because of the bank's efforts and dedication when it comes to its community-focused banking services especially within the neighborhoods that are underserved. Among the services offered by the bank include mobile banking, savings account, online banking etc.
3. Citizens Trust Bank
Citizens Trust Bank is a Black-owned bank that has been serving the communities of Atlanta and Columbus, Georgia since 1921. Founded by business leader Heman Perry, Sr., Citizens Trust Bank is among the biggest Black-owned banks in the US. It has assets that total to $410 million. The bank has been operational for 100 years and among the services that they offer include checking, savings account, online and mobile banking etc.
Citizens Trust Bank is committed to promoting economic development and financial empowerment, and has a strong track record of supporting local businesses and individuals. With a dedication to social responsibility and community involvement, Citizens Trust Bank is a powerful force for positive change in the Atlanta and Columbus areas.
4. First Independence Bank
First Independent Bank was established in 1903 and has its headquarters in Detroit. It's the 7th largest Black-owned bank in the US. The bank's assets total to $286 million. The bank is very keen on supporting its community by building relationships that are mutually beneficial to their customers, local community as well as their employees.
First Independence Bank is known for its focus on personalized service and customized financial solutions, and is committed to helping clients achieve their financial goals. Some of the services offered by the bank include personal checking, online banking, savings account and HSA etc. The bank is also committed to social responsibility and community involvement, with a range of programs aimed at supporting local businesses and individuals.
5. Liberty Bank
Liberty bank is the oldest mutual savings bank, the 3rd largest bank in Connecticut, and it's among the biggest Black-owned banks in the US. The bank’s headquarters is in Middletown, Connecticut and throughout the state, they have 62 banking offices. Their total assets are worth about $7 billion.
Liberty Bank has been serving communities in the United States for over 40 years. Founded in 1972, Liberty Bank has a long history of providing financial services to underrepresented communities, with a focus on affordable housing and small business lending. Among the services that they provide include checking, savings account, commercial banking, home mortgages, insurance and investment services.
In addition to its banking services, Liberty Bank is also committed to community development and social responsibility, with a range of programs and initiatives aimed at supporting economic growth and financial literacy in the communities it serves.
6. The Harbor Bank of Maryland
Founded by Joseph Haskins Jr. and Calvin Harrell, the Harbor Bank of Maryland was established in 1982 and was the first minority-owned, full-service bank in Baltimore. In total, the bank has assets worth $265 million. The bank has seven operational locations. Primarily, it serves the Baltimore, Maryland Metropolitan area. As a CDFI, the bank has managed to initiate more than $1.5 billion dollars of new development in the Baltimore area.
The Harbor Bank of Maryland has a mission to provide accessible financial services and promote economic development in underserved communities. Today, the bank offers a range of banking services, including personal and business banking, loans, online banking, checking, savings, credit cards etc.
The bank is also committed to social responsibility and community involvement, with a range of programs aimed at supporting local businesses and individuals. These programs include financial literacy education, affordable housing initiatives, and scholarships for students. With a strong focus on personalized service and community involvement, The Harbor Bank of Maryland is a trusted financial partner for individuals and businesses across Maryland.
7. Industrial Bank
Industrial Bank is the oldest Black-owned commercial bank in the Mid-Atlantic region that has been serving the communities of Washington, DC since 1934. Founded by Jesse H. Mitchell, Industrial Bank played a critical role in providing financial services to African Americans during a time of discrimination. Their assets total to more than $550 million.
The bank aims at supporting the communities where they operate, as well as provide financial education to their customers in order to guide them in achieving their financial goals and create generational wealth. Some of the services offered by the bank include savings account and investments, checking etc.
Industrial Bank is committed to promoting economic development and financial empowerment, and has a strong track record of supporting local businesses and individuals. The bank also invests in the community by offering a variety of programs, including financial literacy education and scholarships.
8. Mechanics & Farmers Bank
Mechanics & Farmers Bank (also known as M&F Bank) was established in 1907 with a commitment to serving their community in order to enhance development for the individuals and the community at large.
Founded by a group of nine prominent businessmen led by John Merrick, today, M&F Bank played a critical role in providing financial services to African Americans, the bank's assets total to about $257 million and they currently have operating branches in Winston-Salem, Durham, Raleigh, Greensboro, and Charlotte.
Today, M&F Bank offers a range of banking services, including personal and business banking, loans, and online banking. The bank is known for its commitment to social responsibility and community involvement, with a range of programs aimed at supporting local businesses and individuals.
M&F Bank is also a member of the National Bankers Association and the Federal Home Loan Bank of Atlanta, ensuring that the bank has access to the resources it needs to support its clients and promote economic development in North Carolina.
9. OneUnited Bank
OneUnited Bank is a Black-owned bank that has been serving communities across the United States since 1982. Founded by Kevin Cohee and Teri Williams, OneUnited Bank has a mission to empower underserved communities through financial education and access to capital.
OneUnited Bank is the first internet bank that's Black-owned and the largest Black-owned bank in the US, and it's also FDIC insured. Their online services are available in all 50 states in the US as well as in-person branches in Florida, California and Massachusetts.
The bank is a full-service bank and among the services offered by the bank include online banking, mobile banking, checking, savings account, secured credit cards for rebuilding credit etc. In addition to its banking services, OneUnited Bank is committed to promoting economic development and social justice, with a range of community programs and initiatives aimed at supporting underrepresented communities.
10. Unity National Bank
Unity National Bank was established in 1963 and then it was chartered in 1985. Unity National Bank has been serving the communities of Texas since 1963. Founded by a group of local businessmen led by Dr. Joseph J. Long, Unity National Bank is currently the only Black-owned bank in Texas.
Unity National Bank aims at making a difference within the community in which it operates. Some of the services offered by the bank include online banking, mobile banking, checking and savings accounts etc. Among the efforts put in place by the institution include offering financial support towards activities with agencies such as YMCA, YWCA, NAACP, United Negro College Fund, SHAPE Community Center, Boy Scouts of America, Third Ward Redevelopment Council among many others.
Unity National Bank has received numerous awards and recognitions for its commitment to its communities, including the prestigious Bank Enterprise Award from the Community Development Financial Institutions Fund of the U.S. Department of Treasury. With a strong reputation for quality and reliability, Unity National Bank is a trusted financial partner for individuals and businesses across Texas.
Bay Street Capital Holdings
Bay Street Capital Holdings is a financial planning firm headquartered in Palo Alto, California, that provides independent investment advisory and wealth management services. The company's approach focuses on managing total risk and volatility while maintaining and increasing total assets and income, rather than just maximizing returns.
The firm's founder, William Huston, established Bay Street after spending 13 years supporting the United States' largest retirement plan, the $650 billion Thrift Savings Plan. He has been named among Investopedia's Top 100 Financial Advisors for 2021. In California, only two out of nineteen firms recognized by Investopedia as Top 100 Financial Advisors are black-owned.
Bay Street is committed to supporting diverse and emerging fund managers and entrepreneurs. The company believes in advocating for these individuals and was selected as a finalist in the Asset Manager for Corporate Social Responsibility (CSR) category among over 900 US firms.
Sources
https://www.industrial-bank.com/
https://www.cityfirstbank.com/
https://www.theharborbank.com/
