27 Jul 2022

RI Hispanic Chamber of Commerce – Making Bankable Business

Josh Pereira


Glenda Pagan, a Latino small business owner, doesn’t hesitate when asked about the biggest difficulty she faced when establishing Key Treats, her custom cookie company located in Pawtucket.

“A bank loan,” said Pagan.

Latinos are opening businesses faster than any other population in the United States, yet they are facing bigger hurdles than most. Perhaps the biggest obstacle is the ability to secure financing from a bank.

According to a Latino Entrepreneurship report, Latino-owned businesses are significantly less likely to have loans approved by a financial institution than white-owned businesses. Many Latinos must rely on their personal savings and credit cards. Others give up on their dream before it even starts. More than 60 percent of Black and Latinos are rejected by banks for loans.

Oscar Mejias, executive director of the Rhode Island Hispanic Chamber of Commerce, is working with area banks to break barriers and create change.

In the spring of 2022, the RIHCC partnered with Navigant Credit Union and the Papitto Opportunity Connection (POC) and launched Making Bankable Business, a microloan program for Latino entrepreneurs and small business owners. The program, available to Rhode Island’s Latino-owned startups and existing small businesses, provides a low-interest loan of up to $5,000. The program also offers to forgive the loan after two years for those who can show they have used the funds properly to build their business.

The main goal is to help Latino small business owners and entrepreneurs increase access to capital, create relationships and build history with financial institutions, and generate an acceptable and credible credit score.

“Statistics show a high percentage of loan rejections for Latinos across the country. Thanks to POC’s help and our partnership with Navigant Credit Union, we are changing that reality,” said Mejias. “Through this project, hundreds of Latino small businesses will have more opportunity to have their loan applications approved.”

Pagan’s was one of a dozen Latino-owned small businesses selected to participate in this new microloan program.

A Realtor and mother of four, Pagan began making gift baskets filled with sweet treats for her clients as a closing gift. Soon she was making baskets for other Realtors to give as gifts and then for birthday parties and other events. The small baking business that was launched in her Pawtucket kitchen was booming.

“I knew I could do it,” said Pagan.

One thing stood in her way of expanding Key Treats: a bank loan.

Pagan wasn’t rejected – simply because she never attempted to apply for a bank loan.

“I was scared because I didn’t think I could get one (loan),” she said. “How do you get a loan if you don’t have the collateral the bank is looking for? You must make a certain amount of money in order to apply, but how can you get there if you can’t even start your business? Where do you go? That was my challenge.”

The RIHCC is breaking barriers for Latinos who are apprehensive about expanding or starting a business, like Pagan. The microloan she received from the RIHCC with support from the Papitto Opportunity Connection has allowed her business to grow and expand. She has learned the intricacies of building a business through the RIHCC and Hope and Main, a culinary incubator in Rhode Island and has now been able to purchase a key piece of equipment – an edible printer – that will allow her to expand her cookie business.

She can also move the cookie business out of her home and into the Still on Main, a mall in downtown Pawtucket that is home to a variety of BIPOC small business owners and entrepreneurs.

Equally as valuable as the money she has received is the relationship Pagan is creating with a financial institution. Pagan is required to make a small monthly payment ($86) to Navigant.

“You are taking the loan and you must be responsible. Everything you do reflects on your credit for the future so that when one day you apply for a bigger loan, you are capable,” said Pagan. “This program is creating opportunities for us to grow.”

“The Latino business owners and entrepreneurs just needed a little push to start or grow their businesses. We are helping,” said Mejias. “We are showing that there is a way.”

With support from the Papitto Opportunity Connection, the RIHCC will continue to expand its microloan program and offer support to more Latino-owned businesses across the state.

“This program inspires banks to take a second look and give another perspective that brings hope,” said Barbara Papitto, founder of the Papitto Opportunity Connection.

“This loan gave me a jump start and gives us (Latino business owners) a chance. I am so grateful,” said Pagan.

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