What Can You Do to Lower Lending Discrimination?

By Charles H. Green

More than 150 years after the Emancipation Proclamation and 169 years since annexation of Texas, business lenders still discriminate against African American and Hispanic business owners. In last Wednesday’s AdviceOnLoan, I wrote about how racial discrimination continues to plague business lending, costing lenders precious deal flow and potential clients their entrepreneurial aspirations.

Lending is about using capital to make more capital. Letting blind prejudices or blatant SBFI diversitydiscord interfere with your mission to distribute capital to qualified borrowers, which also means you aren’t doing your job. Worse, when purposeful, it’s against the law.

And let’s be honest – I’m aiming these remarks at friends who share my Caucasian ethnicity. Living in Atlanta, whose history is littered with predatory treatment of others from non-white races going back to the Creek and Cherokee Indians, you encounter a lot of conversation about race. It’s complicated to be sure, but it’s also easy to address head-on, particular when performing your job.

What do we do to correct these conditions? As promised last week, here’s a few suggestions that can be a good starting point for most readers:

1. Admit there’s a problem. Lending discrimination is documented across all lines of lending from home mortgages, auto financing, credit cards and even SBA loans. The disparaging statistics haven’t changed much since the 1990s, despite a generation of new lenders and pointed efforts by FNMA, GNMA, SBA and others to reach out to these communities. SBA’s impact is limited because they don’t make or buy loans.

2. Be the change. Purposely seek to bridge these gaps – or opportunities – by cold calling your way into introductions, coffee meetings and lunches with minority real estate brokers, CPAs, attorneys and the other kinds of professionals where you seek out relationships that yield referrals and offer services. Be serious and start a dialogue about how you can help their clients.

3. Staff up. If you’re a manager, introduce some diversity into your business development team by hiring people who are part of these minority communities where you need connections to new business. These new hires can also serve as an ambassador to introduce your staff to someone unlike themselves, to start getting better acquainted with a larger world out there.

Based on the remarks about this topic made recently by SBA Administrator Maria Contreras-Sweet, Orson Aguilar contributed some thoughtful remarks in the American Banker that can supplement my list.

There’s plenty more to say on this topic, but I’d like to hear your thoughts, below or through email at

Now get out there and do the right thing.

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