Fintech Startup Helps Increase Profits For Black-Owned Businesses
A new online banking platform started by a Black woman plans to help Black-owned businesses get the funds needed to get their ideas off the ground. Guava was launched in January by Kelly Ifill and has since amassed over 3,000 members who all joined to get assistance that they were not receiving from traditional banks.
The Struggle of Black-Owned Businesses To Receive Backing
In a conversation with CNBC’s “Make It,” Ifill says that this was never something she thought she would be doing. She came from a family of business owners, from her father to her grandmother and other relatives.
“I had no interest in being an entrepreneur,” Ifill, 37, told CNBC. “I was like, ‘I don’t want that. It looks hard!'”
Instead, she was a schoolteacher, then an MBA candidate and a staffer for seed-stage venture capital firms.
She says she realized that many businesses in her home of Brooklyn, NY struggled to stay open. Not many were able to obtain loans to remain operational. Ifill says she knew she had to step in and offer some assistance. Accoridng to CNBC, Black business owners are much less likely to be approved for commercial checking accounts and bank loans. If they are approved, they often pay higher rates.
“I have grown up understanding what that experience is,” she says. “Especially for Black people [and] especially for immigrants in this country.”
Guava provides services through New York’s Piermont Bank which is a fully accredited Federal Deposit Insurance Corporation member. Each account that is opened by a small business owner is linked to a government ID in order to help prevent fraud.
The online banking platform also offers pilot programs that provide options for business loans. It has also launched Huddle, which is a network for members to share information and learn from industry leaders and financial experts.
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