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Virginia Community Banks Launch $1million Minority Business Fund

Historically, it has been very difficult for minority businesses to thrive in the state of Virginia due to the legacy of underinvesting in minority businesses, along with the barriers towards these communities that make them economically vulnerable. 

Today, the smaller size of businesses, their concentration in high risk industries and the obstacles to access capital, continue to put these businesses in jeopardy. Now, a partnership of community banks in Virginia has created a ‘Banking On Diversity Program’ and a Minority Business Fund to assist minority-owned startups and existing small businesses.

Minority Business Fund

This minority Business Fund started as a way to provide Covid relief to existing minority businesses in the State of Virginia who were hard-hit by the recent loss of revenue and reduced staff. The fund also aims to address the issue of improving race relations in the state and the U.S. as a whole. 

This fund is accessible to minority businesses in Maryland and Pennsylvania too, and the hope is that it will catch on across the East Coast and beyond. With recent new developments within the diversity, equity and inclusion arena, the four banks involved in creating this fund, are showing appreciation and understanding for the importance and benefits of fostering a diverse business community.

Banks Committed to Minority Businesses 

Four banks have collectively committed up to $1 million in interest-free loans to aid businesses which are at least 51% owned, operated and controlled by American citizens of ethnic minority classifications. New businesses that have completed the 5 easy steps to register an LLC in Virginia, and wish to know more about the program or the fund will find all the information on the Department of Small Business and Supplier Diversity Business One-stop page. 

Businesses within the sponsoring organization’s markets are encouraged to investigate whether they are eligible to access this fund once they have learned how to start an LLC in Virginia and have registered their company.

Copyright: TRUiC

5 Easy Steps to Start an LLC in Virginia

The checklist below will help start-ups to decide whether to go straight to the Minority Business Fund registration process, or to hire a professional legal service, at a cost of $150, to navigate the Business One-Stop page on their behalf. 

When establishing a business, owners can refer to the checklist below to ensure that they have followed the 5 steps to register an LLC in Virginia:

  1. Choosing the company name, 

  2. Filing the articles of organization

  3. Fulfilling publication requirements 

  4. Creating an operating agreement

  5. Obtaining an EIN  

An additional step for minority-owned businesses, to qualify for the interest-free loan made available by the Banking on Diversity Program, is to get officially certified as a Minority Business Enterprise (MBE). 

The four banks (Fauquier Bank, BCT – The Community’s Bank, Bank of Clarke County, and First Bank), that have committed to providing interest-free loans to MBE’s that qualify for access to the fund, recommend hiring a professional legal service. 

This service guides start-ups through the New Business Resource Information page that users land on when navigating to the 8 (a) Business Development Program. This recommendation was made after a few MBE’s, who used the 8 (a) Business Development Program to open their business accounts, expressed concerns about the privacy of their information that was entered onto the system. 

However, this recommendation in no way takes away from the fact that Virginia remains one of the easiest U.S. states to do business in. This is especially important when looking at the census carried out in 2020 indicating that the minority population is growing in the region and currently making up twenty-seven percent of residents while generating $57 billion a year in GDP. Users of the 5 Steps to Register an LLC website attest to the fact that the state of Virginia is dedicated to enhancing the participation of MBE’s.

A Welcome Initiative 

This fund is a welcomed initiative for minority entrepreneurs who have frequently struggled to sustain their businesses, particularly because of the Covid pandemic. This fund has generated confidence with minority business owners in the support from banks in their communities. Now, businesses are able to open and operate business accounts automatically when they receive their MBE certification and actively participate in entrepreneurship.

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