The financial industry as a whole must embrace innovation and a new mindset to eliminate the barriers diverse-owned businesses face in areas such as access to credit

COURTESY: WELLS FARGO - Preston SalamiThere is no doubt that 2020 presented some of the greatest challenges small business owners have faced, and that there has been a disproportionate effect on diverse-owned businesses, including those owned by Black and African American entrepreneurs.

Back in June, the Wells Fargo/Gallup Small Business Index survey for the second quarter of 2020 resulted in a relatively high level of optimism among these owners, with seven out of 10 saying their current financial situation was somewhat good or very good. However, the ensuing time has brought increased challenges — and increased uncertainty — for diverse-owned businesses, especially those in Black and African American communities across the country.

As Black and African American business owners continue to look ahead, some key considerations can be made to plan for a future where certainty is categorically uncertain.

Challenges obtaining credit

The Q2 survey specifically highlighted what has continued to be an issue for Black and African American business owners: access to credit. These owners reported the highest levels of both current and predicted future difficulty accessing credit compared to other segments surveyed. Challenges receiving the same consideration for credit that others receive are particularly pronounced in a current environment where these businesses are struggling to stay afloat.

In looking for a solution, it must be acknowledged that the financial services industry as a whole must continue addressing this problem. Diverse-owned businesses have more challenges ahead of them as they stage a comeback. They are often smaller in terms of the number of employees, payroll, and startup capital, and they may not have established banking relationships. These factors make them much more susceptible to economic downturns, and they will need greater access to capital and innovation to be resilient in this pandemic.

Resources that offer access to capital is an area of deficiency that Black-owned businesses face every day. Making credit options available to diverse business owners can make or break the business. In addition to traditional lending, working with Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) can provide additional avenues to access capital.

Supporting these institutions and their mission is at the heart of the creation of Wells Fargo's Open for Business Fund (, the first phase of which has provided additional funding for these institutions to continue their important work.

Another resource available to business owners, no matter where they do their banking, is the Small Business Resource Center (, where individuals can update and create business plans, learn about credit (and how to use it properly), access marketing tips, and much more.

Flexibility and leadership

Community involvement and interaction (virtually and otherwise) are great ways to create a support network and become a change agent in your community. Diverse-owned businesses can use the power of the pivot in times such as these. When conditions change, adjusting the business plan, budget and marketing strategy will be beneficial, as well as communicating with employees and customers about any changes.

Being transparent and having solid plans while moving through changes in these unpredictable times makes all the difference for your business, but most of all for your customer experience. Making a plan for "possible pressure points" will ease the business owner's mind as well as those who support them.

Where do we go from here?

There's little about the future that seems predictable right now, which can make it difficult to figure out how to move forward. A good place to start is with the things that can be controlled, such as putting customers first, being a community leader, and understanding the most effective business planning tools and resources. While success is never guaranteed, taking these steps can certainly move the needle in the right direction.

In addition, financial institutions have a lot of work to do to create an equitable system and take care of Black and African American-owned businesses. Share your feedback with your bank. Let them know what you need and where you see things falter, and share your suggestions to help create the change you want to see.

Preston Salami is a Wells Fargo branch manager in East Portland. He can be reached at 503-667-7181 or This email address is being protected from spambots. You need JavaScript enabled to view it.

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