The banking world might be said to operate on the principle Ronald Reagan made famous: “Trust, but verify.” A handshake agreement is often backed up by a ream of financial bona fides from a borrower.

But what if trust is lacking on the part of either the lender or the borrower? Lending institutions have a history of being wary of women and minority business loan applicants. This history has generated skepticism on the part of those would-be borrowers. 

That’s where Channel steps in. Channel, designed to be an inclusive small business center for minority entrepreneurs, was established in downtown Wilmington in 2021 by Live Oak Bank. It aims to help small business owners find the resources they need to stay on a path of growth, a path that, for minority entrepreneurs, is often studded with potholes, said Live Oak Bank President Huntley Garriott in an interview last September. 

To change minds and change the experience, “It’s all about building trust,” said Chakema Clinton-Quintana, Channel’s director.

“In a minority community, trust did not exist when it comes to banks,” she said in the September interview. “‘You can’t get loans,’ ‘No one wants to give you anything,’ – you know, all of those things that you hear from the minority community.”

When, in November 2021, Channel opened its doors at 106 Market St., Suite 200, it had zero clients, Clinton-Quintana said recently. 

“We had to go out and find minority small business owners,” she said. “To date, however, we’ve served more than 428 small business owners and counting.”

Aspirational or current business owners at all stages of their commercial journey have been using Channel’s resources.   

“We meet each entrepreneur where they are,” said Channel business adviser Atiba Johnson. “What they need could be something as simple as a business plan or accounting help. We can help them get their EIN number or set up their LLC. We don’t like to just give out money; we want to assist them with their journey.”

Officials at Live Oak Bank, which grew from its Wilmington startup roots to become the nation’s largest SBA lender, realized they could help fill in some of those potholes for minority small businesspeople in the Wilmington region, ultimately increasing diversity in business ownership.

To eliminate or lower “significant barriers to entry” for these businesspeople, “we’re designing learning programs and community support systems that make entrepreneurship more accessible to people from all walks of life,” Live Oak Bank’s Channel overview states. “This diversifies and strengthens the regional economy and builds a pipeline of healthy businesses Live Oak is eager to serve.”

Channel offers coworking space for its clients’ varying needs.

“Some small business owners need office space where they can come sit with other entrepreneurs and learn from them,” Clinton-Quintana said. “They sometimes need private offices where they can meet with clients. They can reserve training space.”

On the training and education side, Channel offers 16 seminars as part of its technical assistance. Among the topics for these roundtables are basics such as financial literacy, marketing and tax preparation. And it offers one-on-one coaching.

The center collaborates with other small business resources in the area.

“We are part of what we call the coalition,” Clinton-Quintana said. “That includes Genesis Block, the SBTDC (Small Business Technology and Development Center), the Center for Innovation and Entrepreneurship. If one of us can’t help, we can refer someone to another coalition member. We share any webinars and each other’s events.”

Clinton-Quintana and Johnson also share their own experience and knowledge.

She came to Channel from Live Oak Bank, where she was vice president of inclusive small business. She understands financial processes and regulations, and ways to navigate them. He is a serial entrepreneur and certified business adviser, who started as a volunteer at Channel. 

Johnson’s intake process for new clients includes charting out a business or business idea’s strengths, weaknesses and opportunities. He also discusses business plans. But most of all, he begins the process of creating trust and forging a relationship.

“Everyone isn’t ready for money,” Johnson said, explaining that part of his job is helping clients chart a path to the point at which they can successfully apply for a loan. There have been some success stories so far.

Sometimes, said Lillian Graning, Live Oak’s head of corporate responsibility, a small business already has a relationship with a bank. If not, she said, “We have products: from micro-lenders to Live Oak Bank’s traditional lending [products]. But we don’t want to give small business owners more debt than they are ready for or disproportionate lending.”

From zero clients to more than 400 in 18 months is an accomplishment. Clinton-Quintana said she was surprised at the number of minority-owned small businesses that existed in the Wilmington region. Finding them, however, was somewhat of a challenge.

“For the most part, we used word of mouth,” she said. “We camped out in various places where small business owners were likely to gather. We went to their sites. We went to churches, we were on social media: Facebook was truly our friend. Atiba has about 5,000 friends on Facebook and knows everyone in Wilmington.”

Graning said Channel has been good at engaging prospective clients, building relationships with them and keeping them engaged. 

“That’s where the community has come in so strong,” she added. “This is a small town. The way we care for clients is very differentiating. But still, some people still think that we are somehow profit-generating. We are a free resource. Reaching out to Chakema and Atiba is easy to do. They are willing to hear out what a business owner is thinking about, getting them to where they need to be.”

Once potential clients realize that Channel is there to help them without cost, they are generally receptive, Clinton-Quintana said.

“We have built a lot of trust,” she continued. “If anyone was wary in the beginning because we are an arm of Live Oak Bank, they see now that this is not a fad. We’re not going away. This is Live Oak’s way of giving back. We’re here to stay.”