St. Louis Public Radio: Black Business Owners Face An Uphill Battle Securing Bank Loans

St. Louis Public Radio, January 6: Black Business Owners Face An Uphill Battle Securing Bank Loans

Freddie Lee James Jr. has long been a sauce man.

His home-whisked Ghetto Sauce made him the king of cookouts. Family and coworkers would clamour for the zesty, sweet and spicy barbecue sauce. After years of their encouragement and five years before he was to retire from his construction job, he decided to take it to the next level.

He founded Freddie Lee’s Gourmet Sauces with his wife, Deborah, in 2010. After ironing out the branding and labels, the couple struck deals for spots on the shelves at Schnucks, Dierbergs, Straub’s, Hy-Vee and Home Goods. Their sauce is now sold in over 1,000 stores in the U.S. and Jamaica.

Despite those retail successes, the couple still can’t secure a business loan from a bank, even though their enterprise brought in about $200,000 in annual profits for years, they said.

“We have 750-760 credit score,” Freddie Lee James said. “We pay all our debts. We don’t have no problems with that. But they were saying that the sauce business is not generating enough capital to their standards.”

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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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