Take Five: BMO lending program focused on minority businesses

BMO Harris Bank has launched a new $500 million lending program that is focused on minority-owned businesses, and one of the stated reasons is to ensure an inclusive economic recovery from the COVID-19 pandemic. Anthony Hudson, managing director and head of the economic equity advisor group for BMO, is leading this lending program, which is part of a broader five-year, $5 billion commitment called the BMO EMpower initiative. The initiative addresses barriers faced by minority businesses, communities, and families, and the idea is to remove barriers to inclusion and create more opportunity for recovery through lending, investing, and engagement.

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Anthony Hudson

We wanted to start by asking a question we might already know the answer to, but to put it in your own words: Why is this new initiative being launched?

“This initiative is happening because we see an opportunity to double down our efforts. Frankly, when you look at the focus that we have on Black, Latinx, and women-owned businesses through this initiative, those are all segments of our business population that have been disproportionately impacted [by the pandemic]. I would say historically, they have been disproportionately impacted but even more so during this pandemic. For us, EMpower is a way to continue to our efforts with this group and really double down our efforts to ensure that we’re giving them access to what they need to scale and grow and win beyond this moment in time.”

How will recipients be evaluated or selected? Are there any particular criteria?

“My team works directly with clients in the mid-market space, and so there is a heavy emphasis on relationship banking. How we start the assessment is really in getting to know the owner that’s in front of us. We truly get to understand the business, meeting that owner where they are in the communities where they exist, understanding their goals and aspirations, and understanding some of the challenges that they’ve had historically. It’s through that process of getting to know one another and building that trust that we then would enter into a discussion just around how we move forward. That process, and the guidelines that exist there, aren’t any different than how we would engage any other prospect.”

How closely will program administrators work with local entities like the Black entrepreneurial hub the Urban League of Greater Madison is planning for the South Park Street corridor. The proposed facility has received funding from the city of Madison, Dane County, (and now American Family Insurance), but will the BMO program connect with entrepreneurs there to at least make people aware of the availability of this program?

“That’s a great question. Having worked in Dane County for the past four years, I am actually a board member for the Urban League. So, I work closely with [President and CEO] Dr. Reuben Anthony and his team as it relates to all the initiatives that they have been able to move the needle on over the last four years. Specifically, that hub that you just mentioned is one that Dr. Anthony and I are in conversations about. What I would say is that a program like this initiative can’t be successful without strong partnerships, strong community partnerships. So, I’m grateful that we have a very long history of partnering with organizations like the Urban League for many, many years, and those connections and that relationship will enable us to grow and scale this initiative and make sure we’re serving the community across the board. The short answer is I am very closely tied to Dr. Reuben Anthony and the work and the focus that he has on that hub, and we do look forward to being able to partner together.”

We’ve seen other corporate entities go into this area by supporting programs like American Express with its IFundWomen and IFundWomen of Color lending platforms, but do you expect other financial institutions to establish programs like this?

“I do believe that others will follow suit and frankly I see many competitors that are stepping up and rolling out different initiatives to be active and to support Black and brown communities. I think what makes our initiative different is the fact that we have a diverse team of bankers that is focused on a segment of the business population that has been underserved, and so we’re looking to bring the best of BMO … and this diverse team is here to mobilize these resources and make sure they connect to the Black and brown communities that are disproportionately impacted today. So, I do believe there will be other banks that follow suit but frankly, I would say that what we’re doing today is very different and we’re excited about our ability to have a real impact.”

Other comments?

“It’s important that this initiative have a real impact in Wisconsin and specifically in Madison and Dane County. As I said, I’ve worked in Dane County the past four years, and so it’s really important to me that these resources touch Dane County in a significant way. I would also say that this certainly has a social impact, but we also believe it’s good business. This is really good business for us. We believe it’s an opportunity that’s been underserved and hasn’t had the appropriate focus for many years by most banks, and we believe this is a great opportunity for us to double down on our efforts.”

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