Two years after making pledges to increase funding to Black entrepreneurs, Canada’s six big banks have approved very few loans for Black business owners, and their reasons sound more like excuses.
The Globe and Mail reports four of Canada’s top banks, The Bank of Montreal (BMO), The Canadian Imperial Bank of Commerce (CIBC), The Royal Bank of Canada (RBC) and the Scotiabank (SB) came together with Canada’s government and Black Business organizations during the Black Lives Matter movement to increase funding for Black entrepreneurs and businesses.
However, the effort fell apart and each bank launched its own program, which Black entrepreneurs say includes a significant lack of transparency about the loans.
BMO, which pledged $78 million to Black-owned businesses earlier this year, told The Globe and Mail that its program has received nearly 100 applications from Black entrepreneurs and they have approved several, although they did not say how many.
RBC also declined to give specifics regarding its lending program for Black entrepreneurs. Executive Vice President Greg Grice said the bank is currently focused on providing business training and financial education workshops to help Black entrepreneurs.
CIBC also wouldn’t provide details, but said it’s working with the Black Opportunity Fund (BOF) to help Black entrepreneurs, and has given out 10-year loans of between $5,000 and $250,000 for equipment and two-year loans of up to $5,000 and $100,000 for working capital.
Lisa-Ann Geddes, who owns the Vegan Delights restaurant in Whitby, Ontario, initially applied for a loan with another financial institution, but became frustrated with their process and applied to CIBC’s program. The restaurant owner praised CIBC’s program, saying her loan officer was responsive and caring.
“They have been tremendously helpful,” Geddes added.
SB, which launched its program this summer, said it’s too early to comment on its program and TD Bank said it would announce more on its program later this year. National Bank currently has no plans for a loan program, but is working with the BOF on a $5 million investment fund.
According to Craig Wellington, the executive director of the BOF, progress has been slow, but part of that is because of the time it takes to get entrepreneurs and businesses to the point where they can use financing.
In America, the CEOs of JPMorgan, Bank of America, Citi, and others promised more than $30 billion to Black banks to help Black entrepreneurs. Black bank CEOs have said the money has been a significant help, allowing them to acquire customers at faster rates, lend to more Black-owned small businesses and entrepreneurs, service more mortgages for Black families, and improve their technology and operations in previously unimaginable ways.
However, Black bank CEOs add that to close the racial wealth gap there must be sustained and continuous assistance over years from larger banks.