Before its collapse last month, Silicon Valley Bank was known to investors of color as a place that fostered a community of minority entrepreneurs and provided them with both social and financial capital.
SVB regularly sponsored conferences and networking events for minority entrepreneurs, and it was well known for funding the annual State of Black Venture Report spearheaded by BLK VC, a nonprofit organization that connects and empowers Black investors.
“When other banks were saying no, SVB would say yes,” said Joynicole Martinez, a 25-year entrepreneur and chief advancement and innovation officer for Rising Tide Capital, a nonprofit organization founded in 2004 to connect entrepreneurs with investors and mentors.
Minority business owners have long faced challenges accessing capital due to discriminatory lending practices, experts say. Data from the Small Business Credit Survey, a collaboration of all 12 Federal Reserve banks, shows disparities on denial rates for bank and nonbank loans.
In 2021, about 16% of Black-led companies acquired the total amount of business financing they sought from banks, compared to 35% of White-owned companies, the survey shows.
“We know there’s historic, systemic, and just blatant racism that’s inherent in lending and banking. We have to start there and not tip-toe around it,” Martinez told CNN.
The Financial Services Forum, an organization representing the eight largest financial institutions in the United States has said banks have committed millions of dollars since 2020 to address economic and racial inequality.
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