MBN USA

October 24, 2023

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BCF helps MBEs gain a capital advantage

By Tonya McMurray

One of the biggest challenges for minority businesses is access to the right capital, at the right time, to support business growth. The Business Consortium Fund, Inc. (BCF) seeks to address that challenge by providing both loans and business advice and education that will empower minority entrepreneurs to maximize business opportunities.

“We help supply chain businesses take on debt as a tool for growth,” said Sahra S. Halpern, president of BCF. “We want to make sure that each business we touch is positioned to become the strongest supply chain partner that they can become both for their own growth and also to bring that wealth back into their family and their communities.”

BCF was started in 1986 by corporate members of the National Minority Supplier Development Council Inc. (NMSDC) who recognized that access to capital posed a significant challenge to their minority suppliers. Those corporate members raised $20 million in seed funding and BCF used that money over the next 35 years to fund a variety of loans and grants for minority business enterprises (MBEs).

Halpern joined the organization in September 2021 to help recapitalize the fund so BCF could continue its mission of providing capital to minority entrepreneurs. In the two years since Halpern came aboard, the organization has raised another $20 million.

“Black, Hispanic and Asian borrowers still have less than 30% of their financing needs met by banks, including Black borrowers who only have 16% of their financing needs met. White borrowers, on the other hand, have 48% of their financing needs met,” Halpern said. (Source: Federal Reserve Banks 2021 Small Business Credit Survey)

We are here to close that gap,” she added.

A friendly lender

BCF offers both micro loans of between $15,000 and $100,000 and small business loans from $100,000 to $1 million. Regardless of the loan amount, BCF aims to make the loan process easy and comfortable for MBEs.

“Studies show that minority business owners are often more reluctant to go to bank because of the disparities that have existed,” Halpern said. “Often when a business comes to us, they’ve either been denied by a bank, or they haven’t really engaged in the financial system. We’re often seen as being a friendly lender. We structure our loans for the benefit of our clients, and we want them to understand that from our first interaction.”

Every loan application at BCF starts with a consultation designed not only to help the business understand the loan process and what they can afford to borrow, but also to create a plan for how the loan will help them grow and prosper.

“We don’t want to have our loans be smoothing the cash flow from last year’s misses,” Halpern said. “We want every dollar to have the purpose of creating success for the future. And it’s not just strengthening the balance sheet. It’s also making sure they have the right policies and practices in place so they can be supply chain partners that other businesses will be able to depend on.”

Unlike a traditional bank, BCF partners with MBEs throughout the life of the loan, even offering help if the business runs into issues with repayment.

“We are not a bank, so we don’t need to immediately put a troubled borrower into default,” Halpern said. “We’re going to work with them, help them get back upright and be able to repay. We’re willing to do that because the purpose of the loan is to help the small business to grow. We want to make sure MBEs know that if they come to BCF, they are going to be the beneficiary of tools for growth.”

To learn more about The Business Consortium Fund, visit bcfcapital.com.