Paris Alston: This is GBH’s Morning Edition. August is Black Business Month, but as the month comes to a close, one organization is pushing for support of minority-owned businesses year-round. As a Certified Community Development Financial Institution, or CDFI, the Dorchester Bay Economic Development Corporation provides capital and resources to more than 300 businesses a year, with an emphasis on owners who live in Boston’s most underserved neighborhoods. CEO Kimberly Lyle Joins us now, along with Ricardo Louis, who received some of that funding for his valet business, Privé Parking. Hello to you both. Thanks for being here.

Ricardo Louis: Thank you for having me. Hello.

Kimberly Lyle: Glad to be here.

Alston: So, Kimberly, a recent McKinsey study on the racial wealth gap found that many of the entrepreneurs that CDFIs work with are not only owned by people of color, but they’re also micro-businesses with under five employees. What makes it harder for them to get the funding they need?

Lyle: One of the biggest barriers that Black-owned businesses and other minority-owned businesses have is a lack of generational wealth. Often these entrepreneurs are having to self-fund these businesses from their own savings, borrowing money from family members, taking out high interest rate debt. So they really lack the generational wealth that gives other business owners a leg up.

Alston: Ricardo, can you speak to that from your experience? I know that you have received a $60,000 loan from Dorchester Bay. Tell us more about how that helped you.

Louis: Yeah. I think it was at a crucial point within our industry. It was a really tough summer. It was a tough year with, just with everything going on with the economy and just, up and down trend. But when you have, you know, CDFIs like Dorchester Bay that’s willing to be a lot more lenient on the requirements and understand the market and understand the struggles and the challenges small local minority businesses do have, I think it makes a huge difference, a major impact.

Alston: And what do you think would have happened if you didn’t get this funding?

Louis: I think we would have had different alternatives like Kim mentioned. You know, we tend to go to our our friends, our family, maybe some hard moneylenders, which always is not the most favorable interest. So it’s a challenge. It really is. It’s a real challenge. And it’s ongoing challenge, I think, for a majority of small businesses.

Alston: And, Kimberly, tell me more about the terms of these loans. Ricardo’s mentioning that it’s a little more lenient, but what are the mechanisms in place to make sure that business owners like him are able to pay these back?

Lyle: Yeah. So one of the things we really pride ourselves on in Dorchester Bay is that we’re not just providing capital. We also see it as a partnership with the businesses we’re working with. And that means we’re there to provide free business coaching. It means we’re there to help businesses think about how to make their business sustainable over the long term. So that’s a big part of how we’re able to work with the businesses like Ricardo’s, so that they are effective over a long period of time. In addition, we do have a lot of flexibility around our lending. And what that means is we want businesses to come to us if they are encountering difficulty in the business because we can think about different loan terms, we can think about pausing payments. We can try to find some other emergency resources so that they are able to continue running their business. And they don’t have that fear of, if I can’t pay this loan, what’s going to happen to me?

Alston: We are in a period of economic uncertainty. Do you have any concerns about the funding that you’re able to give out running out, or even defaults on those loans, given where we are?

Lyle: Well, one of the things I’ll say is CDFIs like Dorchester Bay actually have really low default rates, and that’s nationally. And part of that is because we have really good relationships with our clients. There’s a trust there. And so when clients do get into difficulty, instead of retreating and avoiding us, they really want to engage and figure out how can we move through this together. That said, things happen, right? And sometimes businesses aren’t able to pay their loans. We are not, at Dorchester Bay, currently seeing a huge increase in that. The challenge we are seeing is us being able to access capital, so that we can then in turn lend it to businesses like Privé Parking. So our challenge is more around continuing to access capital at the CDFI so that we can deploy this money into our neighborhoods.

Alston: And what would make that easier?

Lyle: Certainly, a reduction in interest rates. Another part of that really is philanthropy. More people being aware of the work that CDFIs do and wanting to invest in organizations like Dorchester Bay, that would go a long way towards us ensuring we have a well-capitalized fund that we can use to lend to small businesses.

Alston: So, Ricardo, your business is obviously just one of many that Dorchester Bay has helped. What would be your advice to say, a small business owner who’s really looking for a lifeline right now?

Louis: Don’t give up. We are all going through the same challenges and the same struggle. But, you know, I think of Dorchester Bay as an example of hope, right, and what happens when you really are just intentional and focused on access to capital. As long as you have a plan that makes sense, and that builds towards growth within your business and obviously in your industry, I know you’ll be okay, because we’re a prime example.

Alston: Well, that is Ricardo Louis, who is the founder and owner of Privé Parking Valet Service. Ricardo, thank you.

Louis: Thank you.

Alston: We were also joined by Kimberly Lyle, CEO of the Dorchester Bay Economic Development Corporation. Kimberly, thank you as well.

Lyle: Thank you.

Alston: You’re listening to GBH News.

Small business owner Ricardo Louis was trying to expand his valet company, Privé Parking, during a moment of economic uncertainty.

“I think it was at a crucial point within our industry. It was a really tough summer,” Louis told GBH’s Morning Edition co-host Paris Alston.

Help came in the form of a $60,000 loan from the Dorchester Bay Economic Development Corporation, a company that has provided small business loans and other resources to people in Boston’s underserved neighborhoods since 1979.

Dorchester Bay is a Certified Community Development Financial Institution, or CDFI.

“When you have CDFIs like Dorchester Bay that’s willing to be a lot more lenient on the requirements and understand the market and understand the struggles and the challenges small local minority businesses do have, I think it makes a huge difference, a major impact,” Louis said.

August is Black Business Month, but as the month comes to a close, Dorchester Bay Economic Development Corporation is pushing for more support for minority-owned businesses all year long.

“One of the biggest barriers that Black-owned businesses and other minority-owned businesses have is a lack of generational wealth,” Dorchester Bay CEO Kimberly Lyle said. “Often these entrepreneurs are having to self-fund these businesses from their own savings, borrowing money from family members, taking out high interest rate debt. So they really lack the generational wealth that gives other business owners a leg up.”

Louis said that, if he had not gotten the loan from Dorchester Bay, staying in business and expanding would have been more challenging.

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“We tend to go to our friends, our family, maybe some hard moneylenders, which always is not the most favorable interest,” Louis said. “It’s ongoing challenge, I think, for a majority of small businesses.”

Lyle said the organization focuses on providing more than just money.

“We also see it as a partnership with the businesses we’re working with,” Lyle said. “That means we’re there to provide free business coaching. It means we’re there to help businesses think about how to make their business sustainable over the long term.”

They also offer more flexibility around lending, she said. CDFIs like hers have low default rates, in part because they work to build trusting relationships with the people they lend to.

“What that means is we want businesses to come to us if they are encountering difficulty in the business because we can think about different loan terms, we can think about pausing payments,” Lyle said. “We can try to find some other emergency resources so that they are able to continue running their business. And they don’t have that fear of, if I can’t pay this loan, what’s going to happen to me?”

But economic uncertainly means Dorchester Bay itself is having a harder time getting money to lend out, Lyle said.

“Our challenge is more around continuing to access capital at the CDFI so that we can deploy this money into our neighborhoods,” she said.

What could make that easier?

“Certainly, a reduction in interest rates,” Lyle said. “Another part of that really is philanthropy. More people being aware of the work that CDFIs do and wanting to invest in organizations like Dorchester Bay, that would go a long way towards us ensuring we have a well-capitalized fund that we can use to lend to small businesses.”

Louis said other small business owners who are facing hard times should not give up.

“We are all going through the same challenges and the same struggle,” he said. “But, you know, I think of Dorchester Bay as an example of hope, and what happens when you really are just intentional and focused on access to capital. As long as you have a plan that makes sense, and that builds towards growth within your business and obviously in your industry, I know you’ll be OK, because we’re a prime example.”