Florence Dennis of Flows Tasty Treats and Shané Harris of Prudential Financial
Key to the success of Newark, New Jersey’s minority- and women-owned small businesses, is the comprehensive technical assistance and low-cost funding provided by long-time collaborative partners focused on equity.
Compared to before the pandemic, small business loans cost more while approval rates are way down. However, there is an exception to this trend. Many Community Development Financial Institutions (CDFIs) are keeping interest rates low and approval rates high, thanks to corporations like Prudential Financial that understand the importance of affordable, flexible financing—with technical assistance—to entrepreneurs who face systemic barriers.
Funding from Prudential to Rising Tide Capital and Greater Newark Enterprises Corporation (GNEC) allow them to the support the growth of Florence Dennis’ Flows Tasty Treats. For the 2021-2022 season, Tasty Treats became an official New Jersey Devils team partner for its Buy Black Program, presented by Prudential Financial.
Entrepreneurship: The American Dream For Many Immigrants
Black women are the fastest-growing demographic of business owners in the U.S. However, they face systemic disparities in starting and growing their businesses. The Newark entrepreneurial ecosystem is helping to Black women overcome structural obstacles that limit opportunities.
Sometimes a connection for a would-be entrepreneur is kismet. “On my way to work one day at the train station, I saw a billboard promoting Rising Tide’s Business Community Academy,” said Dennis. It is a 12-week course offering business planning and management training, including budgeting, marketing, bookkeeping, and financing.
Dennis is Ghanaian but grew up in Liberia. A popular snack in Ghana is roasted corn and peanuts. Dennis wanted to introduce African treats to the U.S. market.
“My dad wasn’t enthused about my starting a business in Newark,” said Dennis. “Sometimes you have to go against your parent’s advice and go with your gut.” Dennis’ gut proved to be correct. “If I weren’t in Newark, I wouldn’t have had the opportunity to partner with all these organizations and what they offer.”
Her success can be attributed to a supportive ecosystem in Newark that includes philanthropists, financiers, and technical assistance providers. With funding from Prudential Financial, Rising Tide provided training and other technical assistance, and GNEC provided loans to Dennis. Flows Tasty Treats was one of two companies who was a part of the Devils Buy Black Program presented by Prudential Financial company in the 2020-21 season.
The Minority- And Women-Owned Business Ecosystem In Newark
Rising Tide leverages its nearly 20 years of experience serving 8,000 entrepreneurs in 12 states to provide tailored training, coaching, and other forms of support to meet each entrepreneur’s needs.
Rising Tide Capital has a track record of success. Entrepreneurs who have gone through its programs have a five-year business survival rate of 87% compared to the average rate of about 50%. Typically, revenues for these companies more than double in two years. “For every $1 invested in our programs, there is a $3.80 average economic return,” said Dr. Joynicole Martinez, chief advancement and innovation officer.
Through Rising Tide, Dennis was introduced to GNEC, a CDFI, which provides access to affordable loans. CDFIs are mission-driven, not profit-driven. They were created to lend to underserved communities and are funded by the U.S. Treasury, banks, corporations, foundations, religious institutions, and individuals. Key to the success of CDFIs isn’t just the low-cost funding but pairing that funding with training and wrap-around services. Assistance is provided by the CDFI, and partner organizations, like Rising Tide, which offers complementary services.
It may sound like a smooth ride to success for Tasty Treats, but it wasn’t. Dennis needed money for operations. Thanks to the introduction to GNEC, she was able to get one.
When Dennis started in 2017, her packaging could have been better. With the help of Infinite Design, she improved the packaging. With a loan from GNEC, she bought a packaging machine in 2020, which allowed her to bring packaging in house.
“As a small business, you aim to get into big stores and don’t realize the amount of work it takes…to meet demand,” said Dennis. “I made it into ShopRite.” But, when Covid was high, it was tough for the Tasty Treats team to go into the stores to do demos. “Thankfully, they [ShopRight] were still willing to have me back.” Additional ShopRite stores wanted to distribute Tasty Treats, and Costco and Walmart have expressed interest, too.
“I’ve been amazed by the number of people that have come to love Flows Tasty Treat from all walks of life, not just Africans,” said Dennis. She also introduced a dried coconut treat in three varieties: salted, sweet, and plain. “My dream is to travel the [African] continent and source interesting snacks that I can introduce in the U.S.”
“We think about addressing and making sure folks who haven’t always had the opportunity to build wealth,” said Shané Harris, vice president of social responsibility and partnerships at Prudential and president of the Prudential Foundation. “Entrepreneurship is a way of reducing the racial wealth gap.”
When businesses operate at a deficit compared to others, support and resources that help get a minority- or women-owned business back to where it was isn’t enough. Equity is needed. For example, if a Black woman-owned business couldn’t afford search engine and social media marketing before the pandemic, even if the business recovers from the economic shock of the pandemic, the company is still not going to be able to afford marketing.
Sustained Support Is Needed In A Post-Pandemic World
The pandemic focused on the more significant challenges small businesses face in recovering from the economic shock, especially those owned by Black women. Closing racial, ethnic, and gender disparities will take sustained support. CDFIs and their funders have shown the need for and success of providing more flexible financing during the pandemic.
“We need to be more flexible and more creative and provide highly flexible capital at very low interest for entrepreneurs of color, so they can at least get on that pathway,” said Victor Salama, executive director at GNEC.
“Right now, if you’re going to go get a bank loan, you’re probably going to be between 8% to 10% [interest] depending on your credit score,” said Salama. CDFIs need funders that allow them to buy down interest rates to 3% or 4% and allow borrowers to pay back loans over 60 to 72 months. CDFIs may need to defer interest payments periodically or offer grants.
During the pandemic, there was a lot of momentum for allowing CDFIs to be more flexible in how they provide funding. This flexibility needs to be sustained in a post-pandemic environment to close the racial wealth gap.
“Our vision is to create inclusive communities of resilient entrepreneurs who catalyze and sustain thriving [local] economies,” said Martinez. “Our approach is grounded in deep partnership…so we can build an inclusive and flourishing economy.”
What support will help your small business grow, and where will you find it?
