“When opportunity knocks for a minority-owned business, the BCF is there to help.”
So goes the motto for the Business Consortium Fund, Inc., a business development arm of the National MSDC. The BCF helps MSDC-certified MBEs secure financing—either directly or through partner banks and lenders—and offers financial advisory services.
Founded in 1985, BCF has funded or facilitated the funding of a total of $229.4 million to nearly 800 MBEs over the course of three decades. “One of the way we measure success is in how many jobs we are creating,” said Serafin Mariel, president and COO. BCF has helped create close to 760,000 jobs in its history.
BCF “originated from a conversation that I had in 1984 with David Miller, who was then president of JCPenney,” Mariel said. J.C. Penney Company, Inc. initially contributed $1 million to help Mariel start the fund, and the company is still a supporter of BCF.
One of BCF’s first loans was to Donna Fujimoto Cole, who requested $220,000 to help fulfill a large purchase order. Today, the Houston-based Cole Chemical & Distributing, Inc. has annual sales of $70 million.
Mariel says BCF’s minimum loan is $100,000 and maximum is $1.125 million, with a few exceptions. One MBE may have a compelling business and request more than the maximum amount, while another may take out several loans over the years, totaling more than the maximum. But “we try to structure loans so that we can recover” in case the borrower can’t repay, Mariel said. BCF asks that MBE owners personally guarantee their loans and put down a collateral.
BCF currently has loans out to 25 businesses in 12 states, relying heavily on regional MSDCs to make referrals. MBEs eligible for funding come from all industries. According to Mariel, the BCF recently received two interesting applications; one from an MBE that just landed a contract with Apple Inc., and another, referred by the Northwest Mountain MSDC, from an orchard.
BCF also offers business advisory services. “Unfortunately, a lot of the time, these businesses are good business ideas but they may need some advice on how to set up a business,” Mariel said. BCF can help MBEs with their business plans, supply chain management, HR management and administration, insurance and risk management, and mergers and acquisitions.
To apply for financing from BCF, MBEs must pay a $350 application fee and provide extensive documentation as well as MSDC certification. “We take the time to read all the materials and understand what they’re doing,” Mariel said.