It’s been five years since a white police officer murdered George Floyd in Minneapolis.
In the year after his murder, big banks including JPMorgan Chase, Citibank, Bank of America and Wells Fargo announced plans to invest millions of dollars in small, Black-owned banks across the country, to help those banks make more loans to small businesses in underserved communities.
One of those banks was Optus Bank, located in Columbia, South Carolina. It calls itself South Carolina’s only Black-owned bank. The bank’s president, Benita Lefft, said its goal is to lend to small business owners and other borrowers who face systemic disadvantages that leave them without the things they need to have good credit.
“They may not have equity in a house, or a money market account, or a savings account,” Lefft said.
That lack of savings has meant that the bank hasn’t had a whole lot of money to lend out.
“Without deposits, it makes it very difficult for us to have the capacity to make loans to our communities, to our small businesses,” Lefft said.
So difficult that it wouldn’t have been able to help if, say, a local business wanted to borrow close to $1 million to upgrade its equipment.
“Before the pandemic, the legal lending limit of Optus Bank was somewhere around $500,000,” said Dominik Mjartan, Optus Bank’s vice chairman.
The bank received about $40 million worth of investment, much of it from four big banks: JPMorgan Chase, which declined comment for this story, Wells Fargo, which declined comment, and Citibank and Bank of America, which didn’t respond to requests for comment.
Their investment meant Optus could make more loans — and bigger ones. That pushed the bank’s loan limit higher. “Today, it’s over $12 million,” Mjartan said.
So when a local restaurant called The Friendly Caterer wanted to borrow $900,000 a few years ago, Optus Bank could say yes.
“That’s where the power of that capital is,” Mjartan said. “Without that equity capital, we would never have been able to meet the needs of a small business like Friendly Caterer.”
The restaurant is located inside the Columbia Airport. On the menu: candied yams, green beans, macaroni and cheese, and fried chicken.
The Friendly Caterer opened up about a year and a half ago. Sandra Sims, the owner, has been running restaurants for almost three decades. She also used the loan to open three franchises in the airport: a Jimmy John’s, a Dunkin’ and a Samuel Adams bar.
Borrowing $900,000 was tricky, especially since Sims’s collateral was mostly her equipment. But her track record was solid and so was her business plan for the restaurants.
“It’s the airport,” Sims said. “The airport’s not going anywhere. And the security of the business was based on our performance.”
Sims said she’s more than doubled her staff, from 26 employees to 58. Her sales have more than tripled. And none of this would have been possible without the loan she received from Optus Bank.
“And for it to take a George Floyd to do it, his name will live forever,” she said.
Sims said her goal is to pay off her loan within the next five years.
