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Equivico By NCRC Presents A Fireside Chat: Small Business Access To Capital And Best Practices For Success

Just Economy Conference – May 11, 2021

 

Join NCRC’s Chief Capital Markets Officer Eleni Delimpaltadaki Janis from Brooklyn, New York, as she sits down with small business owners and the Stavros Niarchos Foundation (SNF), one of the world’s leading private, international philanthropic organizations. They will discuss access to capital for underserved entrepreneurs and solutions to the chronic gap in small business lending, what businesses need today and how to survive a crisis. This session is ideal for financial and philanthropic institutions, investors and community development organizations interested in catalyzing our nation’s most important economic engine, as well as for entrepreneurs seeking to learn from their peers.  

Speakers:

  • Dr. Elicia Jacob, Owner, Healing Waters Wellness Center & Spa
  • Eleni Delimpaltadaki Janis, Chief Capital Markets Officer, Equivico by NCRC
  • Stelios Vassilakis, Chief Programs & Strategic Initiatives Officer, Stavros Niarchos Foundation
  • Sofia Zimmerman, Co-Owner of Ottra

Transcript

NCRC video transcripts are produced by a third-party transcription service and may contain errors. They are lightly edited for style and clarity.

Janis 00:01 

Okay, thank you for the collaboration. Okay, so we’re alive. I see it on my attendee side. If you folks want to refresh. I think we should be live now and should be good to go. Okay. Hello. Welcome to the Just Economy Conference. Welcome to the just economy conference again for another session. It’s great to know that you’re all there, even though we can’t hear it. We cannot see you. But we can hear you though in the comments. So please share any questions that you have thoughts that may come up during the session I am Eleni D. Janis I am the chief capital markets officer at NCRC. and managing partner of Equivico and Equivico by NCRC is our new solution to support small businesses with primarily affordable financing, but also training and other types of support. None of what we do is or could be possible without the small businesses that do the hard work and those who support our own work. And I have people who present all of that today and some very dear partners as well. I will start with I do it in alphabetical order. Elicia Jacob, Dr. Elicia Jacob from Birmingham, Alabama, who is an owner of a small business have a great business, the healing waters wellness and Wellness Center and spa. And she will talk to us more about that. Welcome Elicia. Sofia Zimmerman, who is joining us from Brooklyn, and Sofia is the owner and co-owner of Ottra by Zimmerman workshop, and she will tell us more about the business. And Stelios Vassilakis, who is the chief programs and strategic initiatives officer at the Stavros Niarchos Foundation. The Stavros Niarchos Foundation is one of the leading and largest private philanthropists in the world who is also supporting NCRC in their work for a small business and supporting small businesses, and especially during COVID-19. So thank you for joining. I know that actually stages included were all entrepreneurs, here stages, including who he too had his own business, a publishing business for 10 years. So I’d love to take the time and the opportunity to share with our audience and colleagues. What does it mean to be a small business? What should people care? What are the challenges that we face? And how can we and how what will actually say us and I and everyone else who is watching can do to support entrepreneurs? So let me start let me Let’s go quickly around the table. We’ll start with our entrepreneurs. I’ll start with Elicia, can you talk to us a little bit about 32nd your business when did you acquire it, which I think is very recently during COVID. And, and where you’re based, again, just the neighborhood perhaps where you’re at? 

Jacob 02:42 

Yes absolutey. Thank you for the opportunity to speak with you all today. I actually am the managing principal owner of healing waters Wellness Center and spa, we’re located right smack dab in the medical center, or the heart of downtown Birmingham, Alabama. Healing waters was acquired by myself in June of 2019 2021. Of course, I’ll be celebrating my second year in business as a small business owner and employees and have my family work here in the wellness thing. So that’s that’s where we are. And and that’s who we are. 

Janis 03:49 

That’s great. And I know you broke up for a second but then you said that you that your family is working for you. Right, which is not unlike many small businesses. It’s really the impact on the family and the community is direct in many ways. Sofia, tell us about your business. I know Archer has been ingrained Hook which would love to hear about the story of Red Hook in Brooklyn. And I know that your business has been featured at New York Times, Architectural Digest, and more magazines than I can recall right now. But talk to us a little bit about your business. 

Zimmerman 04:22 

Thank you. My name is Sofia Zimmerman. I am the CO owner of Ottra by Zimmerman workshop. About 10 years ago, or actually 11 years ago, we we started Zimmerman workshop architecture design, and four years ago as a sister company that a furniture company specializes in solid wood, help tall furnishings. They’re made to order so every piece is made to order as it comes in. So we do a lot of customization work, we work with designers and, and trying to come up with them for us. And we put that first Singapore this year. So the first thing to say we’re mobile to I guess. And we are at a really interesting point in our company. Because four years ago, when we launched this, we were in a neighborhood called Dumbo in Brooklyn, we since moved to another neighborhood called the GLONASS, which is a very manufacturing-heavy neighborhood. We were there for two years in a temporary space, while we figured out where we were going to be long-term. And now we are in our new flagship space in Red Hook. And where we’re extensively going to be for the next 10 years. It’s a really special neighborhood, because it’s has its roots in manufacturing. And we’re really lucky that Well, some residential has gone a bit high end, there’s still a lot of people that grew up in the neighborhood, which is really wonderful, and a few landlords that are very much committed to keeping manufacturing in that in that area. So rather than selling off their loft buildings to developers, they’ve, they’ve made a great effort to keep small businesses and manufacturers in the area. 

Janis 06:10 

Fantastic. And I know that states can speak to that as well. But I know the neighborhood well from my also years and economic development and that commitment to supporting small businesses and also so that they can stay there and hire locally is very, very critical. So Stelios, can you talk to us a bit about the Stavros Niarchos Foundation. I’d love for the audience to know what you do. And I will and also, of course, your work at the foundation. 

Vassilakis 06:40 

Thank you, Eleni. And thank you for inviting me. It’s great to be here with Dr. Elicia Jacob and Sofia. So the Stavros Niarchos Foundation is an international philanthropic institution, which is actually celebrating its 25th year of existence this year, what we do basically is provide support where it’s needed the most. And over those 25 years, we have done over 4000 grants at 130 countries worldwide. As I said, we’re an international institution, but we have to do at least 50% of our work in Greece. And that’s by definition of our founders will. And that’s what we have been doing over the last 25 years. And there are four main areas that we concentrate, arts and culture, education, social welfare, and health and support. And within those four main areas, we do medium, small and very large grants. What defines us as an institution is the fact that we have an open application process, which means that anyone from anywhere in the globe, as long as they have a designated 50123, or the equivalent status, they can apply to the foundation for support. And we are obligated as a programs department to look into these applications and evaluate them very carefully, which actually allows us to come into touch and collaborate with organizations that would have been very difficult to collaborate with. Otherwise, he would have been almost impossible for us to get to be acquainted with the important work that they do. I work in the programs department and I’m the head of programs for the foundation and I collaborate with a great team of colleagues whose focus is on evaluating the proposals from around the globe from organizations seeking support. 

Janis 08:29 

Thank you, sir. And I’ll say that from my point of view, working, working with the foundation and having worked with many other foundations, and obviously we are always appreciative of, of the opportunity to access capital to do good work. And, and from the point of the foundation, that I always find that SNF is a Dewar, not I know you said support but you support in many ways and even in the way that we are unfolding our small business grant program and other small business support that we are providing. You have been part of ultimately helping us design it and And which brings me to a topic of what the small businesses need. Because we have our needs as an organization who is trying to support. And when I work with entrepreneurs and have done so for many years, I know that you know, the things I hear is access to capital. Why? Why is that critical? Is it possible at all? And then when access to capital comes with, with more than that, it comes with a support, it comes with value support, maybe introductions to a network, or advice, it is even more so valuable. So to get straight to it, I’d love to start with with that. Union COVID, especially capital, and how do we make ends meet? How do we grow even as a business? If there is the opportunity isn’t is a top of mind for everyone? So Elicia, I’d love to hear from you. I know you have a pretty impressive plan of pivoting and surviving COVID. You had a great and we’ve had an impressive career, actually, before you decided to get yourself into owning a business. So you can tell us what got into you and decided to do so. But you bought your business just a few months before COVID hit? Can you talk to us about that? And how did you pay your bills? Did you close your business for a few months? What happened? 

Jacob 10:30 

Okay, so great questions for me during the shutdown that occurred? It was a little scary here. And just to preclude that, yes, I have the opportunity to work at a large Medical Center here in this ama, as a senior director of a large nursing service. So I acquired a lot of my business sense from working in this. So I come from a line of entrepreneurs. So I’ve had several people within my family that were entrepreneurs. So it’s always just been in my spirit. So when COVID hit as you said, I had been in business. Let’s see, I started in June of 2019. And in the beginning of the year of 2020, is when we had COVID to hit. Well, of course, anyone who is an entrepreneur and starting a business knows in the very beginning, that you cannot expect really to be your business to be as profitable, probably for at least three to five years. That’s typically what we look at. Well, when it hit and as you guys know, I did not tell you all of the service suite services we provide but we are most known for providing colon, colon hydrotherapy. We also do a number of other services. Like we offer infrared saunas, biofeedback, we do some detox services. We have a number of herbal and homeopathic products that we provide to our clients as well as educational classes and opportunities have soared. Well, of course, when COVID hit no one wanted to be around anyone. I mean, we were advised to shut the businesses down. Well, we ended up getting a few calls in my clients were really nervous, because many of them depend on us to actually help them to eliminate. So I spoke with my daughter, I spoke with our also the doctor, our county doctor and his office and let them know that hey, I’ve had a few clients to call me they’re really having difficulty right now. I mean, they’re stressed, they already have these situations, the emergency rooms, did not want anyone in the emergency rooms unless it was necessarily unless it was COVID related. And the doctors offices were not really seeing patients either. People just didn’t know what to do. So I spoke with my daughter, as I said, I spoke with Jefferson County, or our county doctor here, his office, and we were given permission to go ahead and open up our services because we definitely were an essential service. So we actually did open our services, but we only offer two of our therapies. One of them is the biofeedback which really helps people to manage stress. And the other was calling hydrotherapy because we do have clients with lazy colons different issues where they just couldn’t go it was just it was horrible at the time. Well, not only that, we did have a few clients come in, but business was at a snail’s pace, maybe a snail’s snail’s pace, so we had to figure out something else to do. And I got together with my family or my staff and we decided that we were going to go ahead and make mask because at the time that wasn’t something that people actually had access to. Well, being a nurse here and being a part of a nursing Association here, I had a lot of contacts as well. So I broke out my sewing machine ended up having to purchase another one. And we had an assembly line at my home. And we made face masks, we made cloth face masks, and we sold 1000s of face Madeline thing. 

Janis 14:36 

That’s amazing. That’s a that isn’t a brand new realism, a way of obviously keeping your business afloat. And and also helping the community right help because that’s important to any masks. And it’s not the only thing but masks were at. They were at scarce supply. I remember, you know, we couldn’t we It was so difficult to get the mask. And how long did you keep that up? For? How long did the mascara simply go business continue for? 

Jacob 15:08 

For a few months, I come to New York where you guys are as well, yes, I got requests from all over from the ask. And we get a month but after you know, after doing very well since people have this has really shaken up the community. And people are taking their wellness and their health care. And so we actually seen an increase in our volumes here. So it’s, it’s actually worked out really well for us here. 

 Janis 15:46 

And speaking of volume, Elicia, and growing business, it sounds that your businesses on a on a path to grow. I’m wondering, in the face of volume, if the volume continues, and you see the need of expanding your operations, perhaps you need more real estate or to hire beyond the family. But even the family doesn’t matter hiring more people, ultimately, how would you go about it? And do you if you needed capital? Where would you find it? So you know, this is your first time doing this, but you’ve been in business obviously for a long time? 

Jacob 16:21 

Yeah, so great question, I actually have really close to I stay in contact with my SBA director. And also I have a close relationship with my bankers here. down to it, and it is coming to it are coming. We are in a position where we are we feel like we’re ready to expand. I have clients who come from all over the South East. So we are hoping to actually open up not hoping we are going to open up a lot. And and another part of either Mississippi or another part of Alabama because it is needed, I have volume that comes in from those areas. So as far as access to capital, that would be my first step is to actually approach the SBA and also the bankers that I work with. And because it’s worked in the past, that would be the route that I’m actually to gain access.  

Janis 17:29 

That’s fantastic. That’s great. And obviously good luck with it. And it is important the fact that you have a relationship with the banking institution. And and and wishing you luck with it, but we’ll come back to it. So so it’s great actually to hear about the business that people take right in your journey in the last 12 months has been probably a roller coaster, but the roller coaster that now it’s just going straight up. But from pivoting to a completely different business model for a few months now to seeing growth, which is great actually not a very strong reminder of the fact that when we talk about small businesses, and even during this crisis there is there’s different level of needs and types of support that businesses need. And some of them do need support to actually grow because there are new opportunities that the situation has created. Sofia and Sofia, talk to us about how you have fared in the past 12 to 16 months now maybe 14 months. What’s happened did you have to shut operations? Is your order. You know, go down demand supply demand go down? Sofia think you need to unmute. 

Zimmerman 18:41 

Okay, I’m back. Okay, good. Yeah, we were in a very interesting spot when COVID hit in. I think it was September October of 2019 that we signed our lease for our space in Red Hook. So by then that was a huge undertaking to get to that place to be able to sign a lease and then start the build out with our landlord. And thank goodness things were taking longer than expected because we I had an agreement that we didn’t serve the pavement until you’re actually in that building. And so we were supposed to be moved in by March 1, that our lambda was behind with the build out. And so we were stuck in our temporary space for a little bit longer, I now look at that as a good blessing. And, and then we didn’t actually end up in our new space until September of 2020. Um, when the COVID hit, you know, I, I joke with some fellow furniture makers that were already in living with such uncertainty so often, as entrepreneurs in general, I’m sure. So when things hit, we just, you know, had to figure out day by day how to do things we like to leave, like Alicia, but we’re very fortunate to have a good relationship with the SBA and also with our bankers. So when it came time to apply for the pbps, we, we didn’t make it in that first round. But we did in the second and, and things worked out. And that helped us a great deal. We have a small, we at the time, like even going into COVID, we had a pretty lean team. So we didn’t have to let anybody go. Some people left voluntarily to take care of their families for a while, and then they came back. And for the most part, we were we were shut down and working from home in ways that we could. We did obviously, like everyone else experience a decline in business, especially when things are so uncertain that month of March, early April, when people didn’t know what was going to happen. With furniture companies, the way things work is you put a deposit down on an order and then you pay the balance, when it’s complete, there’s a lot of hesitancy to put down an order on a deposit if there’s any sense that a business might go under. So so we had to deal with that for a little while, but we had some existing orders to to finish out and then slowly through a lot of relationships that we already had, and trust that we already had with designers that we work with and furniture collectors that we work with, order started to come in. And I think part of it was a little bit altruistic, especially I’m part of people that just wanted to buy something nice for their home because they’re not traveling as much, or they just wanted to support a small business. So um, so while it was very difficult, I think we took things day by day. And I came across a little note I had written to myself in March last year and said kind of connection service and gratitude, like what can I do everyday that’s Connect connecting, how can I be a service? How can I be grateful? And I think, and in the end, I think we ended up stronger as a result, like we’ve learned so many lessons as a result of this, that I think will will, will keep firm for a long time. From a staffing perspective. So orders have since picked up with the furniture. From a staffing perspective, it’s been a bit of a challenge, because we’ve been hesitant now now with explanations, we’re more ready to hire more people. But, um, you know, last, last fall as an example, we were still things were opened up in New York. But we are still hesitant because we didn’t know what what was coming in, which are we going to have another shutdown, we didn’t want to be in a place where we had to lay people off. So again, we just stayed very lean and nimble and made do and thank goodness our team, we have just a team of troopers that have been fantastic through all of this. And now we are finally in a spot where we are hiring and we tend to hire staff that is, you know, we’d love to be able to train from the ground up. So we have a system now in place where we have an entry, a couple of entry level positions. And we train people in the art of making furniture. And then we have some senior level people as well who handle that training. So like I said, I think we’ve learned a lot of really wonderful lessons and all of this we’ve had some hard lessons too. But but but but we’re here and and really happy to be here. 

Janis 23:21 

And then keep going. And I’d love to come back to the to the point of hiring and hiring and training because when we when we talk about small business and supporting small businesses, so rather I would say I’m not sure if we’re supporting or giving small businesses access to what they should have the resources that small businesses have as well. But But both we you know, work with philanthropy work with, with with government, but also when I was investing in small businesses on behalf of government, and you know, oftentimes would get questions about the about what whether the side effects so to speak, are really other side benefits of investing in a small business and supporting it. And I think that what first development to some extent training is really actually is a very is a really important value, both for the intrapreneur themselves. Because whether this you know, however long the business may last it could be for a very long time, or it could be the intrapreneur moves on to something else. But both the skills that an entrepreneur built, but also those actually that the people that you train is a is a word I always like to see, what I see is more small businesses as a local workforce development, you know, training machine, so to speak in a very local micro level, which brings me to Stelios, talk to us about the foundation in a way, the Stavros Nicholas Foundation, started thinking about small businesses. I know you support a range of work across many sectors, I believe you’ve supported entrepreneurs in Greece, but this is still different for you. Can you talk to us about what motivated you? What are you hoping to accomplish? 

Vassilakis 25:04 

So yes, we have done a lot of initiatives that entail entrepreneurial support. But we have never done something like this before. So we had never provided direct support to businesses, everything that we have done in the past involves supporting non for profit, local, non for profit organizations, not not businesses. So at the beginning of COVID-19, we established a landmark initiative of 100 million dollars to provide support, emergency relief, support and recovery support for people suffering from COVID-19. And what became evident to us immediately from the work that we’re doing with our partners on the ground, that we were dealing with a situation that was utterly devastating. And it was rather extraordinary, there were extraordinary circumstances. And you know, you couldn’t really look at things in the same way that we had to look at things before. We had to be flexible, and we had to think out of the box. So small businesses are the heart of the community, and they were suffering the most, that became evident immediately on, the only thing that you had to do was to walk around New York City to see storefronts be closed to realize what is happening. And we were involved with a number of direct cost assistance efforts within that COVID initiative. So when you when NCRC, unequivocal approached us to discuss this, we thought that was a unique opportunity to help communities and to help businesses within communities. Already, we had worked with small businesses in different ways, as part of the COVID-19 relief initiative, we did a street vendors project, where we provided support to a non for profit that was supporting street vendors, so that they can cook meals and continue to do work. And then to provide these meals to communities in need. And we did another program called rethink food through which we supported restaurants, again, for over a period of one year, and there’ll be location was to maintain the working force and at the same time to prepare food that will go to communities in need. So that you know that we were doing at the time. And then we again, we realized that because the situation was extraordinary. And because you know what businesses more businesses could usually count on in emergency cases. Let’s say for example, insurance wasn’t available now. No one could anticipate and no one could take insurance for a pandemic. That was that was a fad. So we decided to do something very unusual for us as an institution as an organization, which was to provide direct grants to small businesses, grants that they will never be obligated to pay back to pay back. And one of the things that I noticed, I mean, there, there has been a lot of support from the government side, one cannot deny that. But you know, reading, reading about that support. reading about that support, it became evident that a lot of businesses were afraid, actually to receive that supports, simply because they were worried about the terms. So we decided to do something that was very different, and something that in a sense, operated as a grant rather, as you know, rather than in law. 

Janis 28:34 

Yeah, I think that I agree, certainly for the support of government. And it is true that still a lot of people were left behind and have been left behind, even in the distribution of the SBA back PPP loans, especially during the first round. A lot of very small businesses, including sole proprietors, but not only were unable to access the funding, and that was really critical at the time. And in our studies. NCRC has been conducting mystery shopper studies for at least two years. Probably more than that. And to assess behavior in the banking system. And we have found that event during the distribution of PPP loans, which are ultimately non risk loans for a financial institution, because they are paid for by government, there was discrimination in the way that people of color were treated, compared to compared to white people. And and it comes in the forms a very subtle, quite very subtle ways. And I trust that they’ll most of it, if not all of it is is implicit is unintentional. But it is the outcome ultimately, is that there is discrimination, whether intentional or not, and access to resources can be limited. Which is why it’s it’s actually great to have that it’s also great to hear from Alicia and Sophia, two businesses that are optimistic, obviously, and you’re not the only ones. It’s part of the nature, right being an entrepreneur, you have to be optimistic, but you’re also back and back in business and doing well. Can we can we talk about, let me check the time. So we have a little bit more time, which is great. We have another 15 minutes. And while I’m about to ask this question, stay here, I think I told you before we get on the phone, but I would love to invite you to ask any questions, you may have the entrepreneurs that love the opportunity to connect with them, please, you know, go ahead and ask it. But when you think of when you think when you think of the top three, maybe lessons learned, or three facts or factors of success for an entrepreneur, and for a small business owner in specific compared to maybe a tech, you know, entrepreneur that’s backed by, by very, very different sources of capital. What are those factors, and Sofia, Elicia, anyone who wants to go first, 

Zimmerman 31:01 

I’ll volunteer one, I may have to think of it longer, but three, but one that just comes to mind. So often, to me is community over competition. And I think that we are just so and I’ve learned that we are part of a growing community of small businesses, and we it’s much more fun, it’s much more productive. And it just makes it much more profitable for us to all be helping each other out, rather than betting against each other in any way. So even with design companies in our neighborhood in Red Hook, I could look at all of those as competitors, I could also look at them as a part of a community and be bringing designers to come and see me and then go and see all these other design companies while but while we’re here, so I believe that community and creating a sense of community amongst like minded businesses, amongst you know, some businesses is very different from your own. Whatever works is a way that you can all build off each other, it can be very lonely, running small business, really lonely, stressful, so many things, and to be among others, and to be fostering sense of community is is essential. And, and I think especially with your competition to figure out a way that you can all work together and we’ll build each other up and lift each other up. It leads to good things. 

Janis 32:24 

Yeah. I’d love to Elicia, do you have thoughts on that. And that’s such an such an important point. I was thinking about it, you know, before when you you were about small businesses and supporting others, that may perhaps some of your suppliers or your partners are also a small business and thinking of that triple effect. And then moving forward together. I you know, I personally like to think and Dana Nelson and writing, she was the one who said this a couple of days ago that even the way we approach work is that the market shouldn’t be a zero sum competition. It’s not a zero sum game. Rather, it is when we combine resources that we can lift each other up and rise together. So Elicia, Coco, Does that ring for you? The idea of working with other small businesses supporting the community, businesses or people in the community? And how is it relevant to what you do every day? 

 Jacob 33:18 

Oh, my goodness, it is it is the most relevant. I’m going to tell you my I guess my my skills as far as social media and the like, are probably something that I can definitely improve on. But during this time, having the opportunity to communicate with others that you couldn’t do it in person now, but you had to find other means of being able to communicate with others, your needs and your wants. They got to talk to you about the fact that during this time, I had a hard time finding gloves. I mean, they were like nowhere to be found. And having, having relationships with people who are in business as well. And having ways to communicate with them other than face to face because we couldn’t do that, if me an opportunity to do something just that simple as getting gloves, and from all over work, the ones that I was used to, but they don’t, they don’t if they worked well. So I think just having the opportunity to be able to communicate effectively and efficiently with others, without being face to face was really something that whale brought us together even more so because that people even that I wouldn’t have thought I would have met, you know, the face to face encounter. So having that communication really has made a big difference in just where I am today, which is another reason why I know it’s time for me to expand. And oh, elsewhere, because now even more people are hearing about, you know, what we do? And you know, what we offer? So yeah, community is really important. And communication, it with those in your community is very important. Well, 

Janis 35:21 

Wanting to check next Stelios, I saw you nodding, I didn’t know if you wanted to intervene here. And you spoke about community as well, obviously, how you were helping restaurants and restaurants helping people. 

 Vassilakis 35:34 

But I think I mean, I wanted to make a point here. You know, people work very hard, and they’re very innovative. But I think, you know, what is really important when you own a small business is to be able to have access to resources. So when when things get tough, you can utilize those resources to survive. My experience, when I used to own a small publishing business was that everything seemed very fragile and tenuous. So you know, one mistake, one unlikely step one, bad day one and one one unfortunate event, and it could put you into a difficult situation. And you end up you know, with a snowball kind of effect. And I’ll give you an example. For example, the street vendors, are they willing, they were willing to work, they were willing to do something, but unless somebody else stepped in and provided the resources, in this case, the funding for them to be able to do so they will, they would have been unable to do that. So having these resources and its own only, you know, the ability to get loans, what matters also is the terms under which you get those loans, many times the terms are prohibitive. So it is very much the same as you know, getting a loan and not getting long. Because if something goes wrong, then again, you find yourself in a difficult situation. So making sure that people who own small businesses have the resources and the help they need when you know, to grow and also to be supported when things go wrong is really, really important. 

Janis 37:14 

Yeah, yes, that’s a very, thank you, thank you for sharing that that’s a very good point. That when things go wrong, and how easy it is actually for, to have to handle a very significant losses. If one step if you take one one step and the terms of the loan, I mean, thank you for sharing that. That is obviously we spend a lot of our time thinking and working on that and also together working on it. But yes, taking a loan that is has carries an APR, it costs and interest rate of 30% 40% is not a loan than anyone should be taking out. But unfortunately, actually a large majority of businesses taking very small loans between 50,000 and 150,000. And up with with those types of loans or other access to cash to create cash with discus mentioned because merchant merchant cash advance and other very expensive form of loans. And it’s and we will be doing more of that I know a lot of our members at NCSA for community development financial institutions, focusing on affordable loans, and finally helping the business prepare the paperwork to get the loans. But but that is really critical. And there is a huge gap, it’s estimated that there is an $87 billion demand for very small commercial loans that is not met. And we know that entrepreneurs have been so this partner especially women, people of color, but really every very small business that they won’t even actually go to a bank that they get to a point and it’s not specific to banks but they won’t even pursue that loan sometimes because they expect that they will be they will be turned down which oftentimes will actually stop prevent people from even thinking about growth, which is an Elicia can talk about that. But growth and growing right is exciting. And the same for you Sofia you’re moving or have already moved to a new space and it’s a Same thing I’m sure it’s probably also nerve wracking to see your bills going up and being liable for that. And so fear How did you I know you own Elicia ago, you were about to speak? 

Jacob 39:21 

Oh, yes. So you, you spoke about bills going up. Now, that is something that I have definitely happen. And I have not passed that cost on to my clients as of yet either. And believe me, it is something that I am concerned with. And I will say one of my saving graces has been the fact that my volumes have grown, you know, tremendously. So that’s been one of my saving graces. But yes, I definitely see a difference. And the cost of my supplies that I actually everything. So although I have not today, pass that cost on to my clients, I know that I have to seriously sit down and take a look at this and make some decisions on how we’re going to move forward with this situation being that it is today. You know, I am a fairly new business owner. I don’t know when you actually consider a business owner as being season. You know, is it depending on how long they’ve been in business. But they have encountered since they’ve been in business? how well they’ve weathered the storm. Not exactly sure. But yeah, it’s something really that I do think about. And you probably are dealing with some of the same issues. Sophie, I’m not exactly sure. But everything, everything is more expensive than what it was when I first started opened my business. Yeah,  

Zimmerman 41:00 

I agree. If people keep asking us, you know, they’re the price of what is going up. And thankfully, I think it’s more applicable to the building materials, wood, like plywood, two by fours, things like that. So hasn’t hit us yet. But what I will say is, and we see increases in cost, and all sorts of little ways things creeping up. But one of the lessons that we’ve learned as well is that there are certain things that we that aren’t happening now. And business still continues on. And in a way more successful. As an example, trade shows I used to invest so much money in going to present our furniture at trade shows. And we realized, you know what, maybe we don’t need to be doing that we’ve done Okay, the last few months without buying an expensive booth and setting up our thing. So finding different ways exploring different ways to get our product in front of people, because certain things just aren’t happening as much anymore. Another example would be, you know, all these things that can happen more virtually. So finding, this has pushed us to explore ways of presenting our furniture in different ways. And some ways happened to cost a lot less than the ways that we were doing things before. So So I look for the silver linings, and that’s been one of them. But, but agree that like raw materials, transportation, nobody ever wants to pay for their shipping. Shipping, a lot more. And it is what it is and, and and will make do. But I think as cost goes up, and inevitably, like we are going to have to increase the pricing, we actually cut the pricing a bit when COVID hit of certain pieces, make things more enticing. But we are going to have to start increasing our pricing gradually. And I think that when that happens, people just need to see the value of what they’re you know, this isn’t you just jacking up your pricing is you offering a service, you are offering a value, you’re offering integrity, you’re offering authenticity, so many things that are baked into that. And they may find it for less somewhere else. But there’s so many things that you add into what you do that you can’t put a cost like a price on right. 

Janis 43:26 

And Sofia on that actually both thank you both as a fan Elicia for bringing up the increase of operational costs. And I hear from it’s happening across the board and I hear from restaurants for example, last week, I had a conversation about one of the major food suppliers I’m sure they’re not unique in it have increased like a straight up increase of 12%. So the same restaurant with a lot less business now has to pay at least 12 12% more for the same chicken or lectures that they were buying a year ago. And then that I’m gonna make one more comment and then I only have it for two more minutes. So I want to answer a critical question from our audience. But to go to status point about the terms of a loan, which is only a loan is only a part of the resources that the business needs. But ultimately, that the cost of the loan does impact the cost of your business, right? It is part of your operational cost, if you have a loan, whatever the resources are, that you use, and which is another reason that it is critical that we that that those loans at lending comes at an affordable, cost affordable and actually honest and appropriate cost. Because if not, someone will have to pay for it. And and if that absolutely is a consumer, but it is the business as it goes through your employees will make less right you will make less with make make you more unlikely to keep your business open and employ people in your community, your employees make less, there is a triple effect that just continues through the system. And as especially now it’s always been a problem. But especially as we’re coming out of COVID, but we see in lending is that first of all, many lenders completely stopped making business loans for a while. And now there is increased demand, but it is likely that loans will come at a higher cost, because the source of capital proceeds tends to perceive and will perceive at least that sometimes a small business lending as riskier than before. Which means that now you have to pay more, even though actually your business may be stronger than it was before because you just made made it through coffee. I’ll go to my question. The question rather from Kathy Jackson’s Cathy Jackson gent, she would like to hear from both of you about how he created a good solid relationship with the SBA and your bank here. And, Elicia, I’d love to hear from you first, because I know that’s a major challenge. You make it sound easy. And you’re easy. And you happen to have it. But can you talk to us about that and give advice to others who are listening? 

 Jacob 46:00 

Yes. So my the first relationship I did have was first with the SBA, I went to them with my business plan, and explain to them exactly what I was looking to do. They actually did like the plan. And just they supported me. The SBA really were the ones that helped me with establishing the relationship with the banker, which I thought was phenomenal. And to this day, the vice presidents of the bank, we will we will chat on the phone, if there’s something that looks kind of strange, that happens in my account, we’ll chat on the phone. So I think it’s really important that you put yourself out there you put yourself in front, you be the one to initiate that contact, if possible, utilize the community resources that you have available. I mean, there there are wide, but what are some of the resources? Yeah, so limited resources. here in the state of Alabama, not only do we have the SBA, but there’s an organization here that’s called score. And I’m sure that there are organizations very similar to score throughout the US and what score provides are mentors. For people who are new into business, people who have been in business for quite some time, they provide those mentors to you utilize that, because it’s free to join, utilize that resource to help you with establishing those relationships. There are there are countless numbers of YouTubers who are out there that actually provides some of that information as well. These are free resources that are available to you, you’re going to have to be the one to go out and seek them but I think that’s a great question. Your SBA can actually provide you with patience and as I said organizations like score as well as provides mentorship and the amazing thing what a mentor can do for you while you’re on your journey. 

Janis 48:15 

Thank you and an SBA loan I think it takes a few months to actually get ready and take it so start early Elicia but they trusted you know that Sofia, right answer  

Zimmerman 48:26 

Okay, so I think we were at a slight advantage with our furniture company I try because we have been banking with we’ve had an existing business account with like since we started Zimmerman workshop, the architecture practice six years earlier. So we’ve always prioritized having a very good relationship with our bank, which we basically chose on proximity. It was across the street from our office at the time and made it easy for us to keep in touch have faced with name pop on over there whenever we needed to ask questions and I think that it was just a very personal relationship that developed as a result. And then I would say with, with the SBA and I, like we went through that process a year and a half before COVID. And I will say it’s a lot of work, it’s so much to put that together, don’t wait until you have to do it, I think it’s a good idea to try to get your lines of credit, get your SBA before, before you’re in a stressed out position to be getting it and take care of your own personal credit as well as big as that. I know, that was a factor with that with us when we were when making our applications. But to your point, Alicia, I think there are so many amazing resources in Brooklyn. evergreen is one of them, that comes to mind. It’s an organization that’s really championing keeping industry and manufacturing in Brooklyn. And there are countless others study from like, macro or sorry, micro or macro chamber Chamber of Commerce organizations all the way down to very like, like, organizational specific places. And I know I’ll give a shout I think like evergreen is one that I just, I am so grateful for various resources that they’ve sent our way. And they’ve just been so generous with all sorts of advice courses, even just our newsletters have always been very encouraging. And last point is surround yourself with other people that have gone through the process of SBA and lending. Like we have a friend who runs a motorcycle school. And she was the one that was constantly answering all sorts of questions when you’re going through the SBA process. And we’re really grateful that that we have various entrepreneurs, various backgrounds in our corner. 

Janis 50:53 

Peer to peer, thank you. And some of the things we’ve learned through this work and we’ll be launching is a training for small businesses, that’s very high level quality training, applied learning that is focused on peer to peer learning, having both industry experts but also really bringing the the entrepreneurs together and solving for career problems. We are out of time and I know that both of us will have clients to attend to because you do run a small business. And in the end, I appreciate it. I know some people are asking about information regarding the affordable loans that will be made that we will be making available. So I say that that will be coming next month. Stay tuned. If you are on this chatroom, we have your email. So we will make sure that you know about it and other people are asking for more of these sessions and to discuss the financial harrows. I know we presented a great optimistic picture with entities optimistic there is so much that is happening in between your ability to actually do what you do and be successful and the ups and downs that we all go through. So we we will be launching and CSE unequivocal will be launching a series of a series of events for small businesses specifically actually to talk about some of those hard end skills and solutions, real solutions of how you know how do you get the loan? How do you manage your operational costs of hire people more to come stay up. And the only gentleman in the in the room, legislature will ask you for your last thoughts as we’ve been we have a minute ago. 

Vassilakis 52:33 

Um, I have to say, first of all, I’m honored to have been asked to participate in this. And I’m also humble and normal that we have had the opportunity as a foundation to do this to provide support to businesses at a really critical time. This is what we do. And our work acquires meaning because there are people there that they can be the recipients without the businesses without the people without the non for profit organizations, whatever they may be. Our work has no meaning. So thank you for inviting me and thank you for the great work you do. 

 Janis 53:10 

Thank you. Thank you on everyone’s behalf for the work that you do. Sofia and Elicia say is very well said thank you everyone for being here and I look forward to doing a lot more and keep it up. Have fun. Bye 

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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