By Randy Tucker
Enquirer staff writer

Limited access to capital, fewer assets to pledge as collateral for loans, uncertain earnings streams and higher failure rates continue to plague minority-owned small businesses across the country.

But African-American small-business owners in Greater Cincinnati have a new ally in the fight to break down those barriers.

The newly formed Cincinnati Black Business Association aims to bring area banks as well as large public and private companies together to assist in securing business loans and gaining access to markets.

"We want to be as proactive as we can and not just complain about the state of black business in Cincinnati," said Tara Smith, president of downtown-Cincinnati-based market research firm T.M. Smith & Associates and co-founder of the association.

"Our group will emphasize broad-based industry participation and problem solving."

The association kicked off its efforts this week with its inaugural Cincinnati Black Business Summit at the Belterra Casino Resort in Florence, Ind.

The event, co-sponsored by National City Bank and The Health Alliance, wrapped up Friday after three days of meetings and conferences involving nearly 100 small-business owners from Ohio, Indiana and Kentucky and top decision makers - including Mike Price, chief executive of National City Bank's Greater Cincinnati operations, and Pedro Bryant, CEO of the Louisville Community Development Bank.

George Pillow, president of Indianapolis-based United Courier, a courier and logistics service with a large office in Avondale, said he hoped banks were paying attention to the issues the summit raised.

"Black business in Cincinnati hasn't been allowed to flourish primarily because they've been denied access to capital," Pillow said "The banks are the key, and I think this summit has helped the banks realize that there's a whole new market out there they can tap into if they support the right kind of businesses."

Price, who along with Bryant sat on a panel addressing the issue of access to capital, said he knows from experience that providing loans to minority and women-owned small businesses can generate lucrative returns.

"We target minority and women-owned businesses because it's a market that's underserved," he said. "... It's a market we focus on quite a bit, and it's one that's growing exponentially compared to other types of small businesses. So it's also a growth vehicle for us.''

Cincinnati 'infertile'

That attitude could help change the business climate in Greater Cincinnati, which many African-American business owners describe as grim.

They say there are few programs to assist black-owned firms gain access to capital.

And, they say, the growth in public procurement opportunities for black-owned firms is lousy, with little accountability for meeting goals to contract with public or private firms.

According to an informal survey of black entrepreneurs in Greater Cincinnati, the area is "infertile" when it comes to growing black businesses at a significant rate.

Smith's market research firm questioned 200 hundred black business owners in Greater Cincinnati - about 10 percent of the total - October through December.

Nearly half of those questioned had applied for either a business loan or line of credit in the past year, but only 19 percent of those were approved.

While 26 percent said they were told they were denied because of poor credit, an even greater number, 34 percent, said they were denied because they lacked collateral.

Special needs

While the survey wasn't scientific, it will serve as model for a more in-depth survey in the future, Smith said.

While Smith acknowledges that the lack of collateral to back a loan should be a major factor considered in credit decisions, she said it's also clear that banks and other lending institutions are not considering the special needs of black businesses.

"More black-owned small businesses are in the service sector, which means they don't have the (same) inventory as many white-owned businesses to put up as collateral for a loan," she says. "But that doesn't mean they don't have a sound business plan and the ability to execute it.''

E-mail rtucker@enquirer.com