The Small Business Diversity Banking Program at National Bank of Arizona launched at the end of last year as a complement to the bank’s diversity, equity and inclusion strategy.
“We created this program to improve equality and expand economic inclusion,” says Santiago Astengo, Vice President of Business Banking at NB|AZ. “Most importantly, we are committed to supporting underserved communities and ensuring that business loans are made available to business owners of all backgrounds through a special purpose credit program.”
The Special Purpose Credit Program is structured around the guidelines provided by the Equal Credit Opportunity Act, and “it was designed to empower women-, minority-, veteran- and LGBTQ-owned businesses by increasing access to the credit and financing they need to grow and thrive,” Astengo explains.
In many instances, he continues, minority-owned businesses have trouble accessing capital under the usual standards of creditworthiness because they may have lower credit scores, weak business performance, insufficient collateral, highly leveraged, insufficient credit history or low liquidity.
The Small Business Diversity Banking program “expands our customary standards of creditworthiness,” says Astengo. “It allows new approaches to the decision-making, and its credit guidelines open the door to a wider universe of business owners so that they can access capital.”
Relaxed credit guidelines, he says, may include less rigid Small Business Scoring Service requirements, a higher BK Score allowance and other underwriting criteria adjustments. A BK Score is an algorithm that considers data points to analyze assets providing trustees and servicers with an immediate evaluation of a property’s probability for sale.
“I am proud to work for an organization that shares the same values I do,” Astengo says. “It feels great knowing there are very few banks offering this special purpose credit program with new underwriting techniques and approaches.”
To be eligible for the Small Business Diversity Banking Program, the business applicant must be a women-owned, minority-owned, veteran-owned or an LGBTQ-owned business, says Astengo. “By certifying eligibility, the applicant also attests that artificial or temporary ownership/management changes were not made for the sole purpose of meeting the outlined program eligibility criteria.”
Astengo’s goal is “to continue spreading the word about our small business diversity program and help as many small business owners in our community as possible. Ultimately, we want to set an example to other institutions and be the leaders demonstrating that we can help these groups access capital and build solid, great relationships with them for many years to come.”