Andre Alexander went from one bank to the next in 2016 to try to secure funding for his church’s nonprofit. After meeting with four banking institutions in the St. Louis area, Alexander finally secured a loan to fund the Tabernacle Community Development Corp.
Alexander is the lead pastor of Tabernacle, a church in north St. Louis. He said many of his parishioners complained about the lack of affordable housing in the area. Through the Tabernacle’s nonprofit arm, Alexander tried to help as many people in north St. Louis become homeowners as possible. Through the business loans he received over the years, people could rent homes through the nonprofit in 2016, and in 2023, it began selling homes to buyers.
“Like any organization, especially being a smaller nonprofit … the harder it is to garner the resources to do what you do, whether that's in the philanthropy space or whether that's banking relationships,” Alexander said. “It's also about advocating and getting people to see that where you are is worth investing in.”
Alexander formed a relationship with St. Louis Community Credit Union, a community development financial institution, nearly two years ago. He was able to connect with former bankers from institutions he previously worked with. The development corporation secured a loan through the credit union for about $800,000 to help with roofing materials, construction, paying contractors, demolition and rehabilitation.
“It has been very critical to help us continue our housing mission,” he said.
The St. Louis Community Credit Union is collaborating with the James S. McDonnell Foundation, SSM Health and BJC HealthCare to provide more funding for business loans to minority business owners like Alexander. Together, the three institutions provided $15 million to enhance the Community Impact Deposit program.
Business owners from underrepresented communities can apply to receive low-interest or no-interest loans to help with equipment, working capital, real estate and salaries.
“Access to affordable loans, especially for Black- and brown-owned businesses, can be hard to come by,” said St. Louis Community Credit Union President and CEO Kirk D. Mills. “The significant deposits that we have received from BJC, the James S. McDonnell Foundation and SSM Health are being used to help businesses hire new staff and grow.”
He said in a statement that the program’s goal is to lend money responsibly to help maximize the community impact.
The credit union’s Community Impact Deposit program began in 2022. Regional private and public institutions have committed over $30 million in funding, which was issued to mostly Black-owned businesses in the area. CDFIs like the St. Louis Community Credit Union create a pathway for communities of color and low-income communities to access capital.
Many business owners of color historically have not been able to access banking loans from traditional financial institutions because of systemic barriers like racial discrimination and biased lending practices. Entrepreneurs often have to deplete their savings accounts or borrow from family members to start their own businesses.
The disparities among Black business owners in the area are great. In St. Louis, white employed residents are 36% more likely to be business owners than Black employed residents. According to the Federal Reserve Bank of St. Louis, for every $1 of white family wealth, Black families own about 23 cents.
“Because of historic financial inequities, the majority of depositors we serve lack the same savings capacity as consumers from whiter, more suburban-focused financial institutions,” Mills said. “That means we have to find alternative sources of deposits to meet the growing borrowing needs of small businesses and consumers.”
SSM Health, James S. McDonnell Foundation and BJC HealthCare are part of a national movement of large institutions investing in low- to moderate-income communities through financing programs at credit unions.
“We are part of the larger community as an employer, and we've learned over the years that aspects of people's health, well-being and ability to thrive are much larger than just the access to the exceptional health care services,” said Karen Bradshaw, regional director of community health at SSM Health.
Bradshaw said if people are struggling financially to fund their businesses, their health and well-being will be impacted tremendously.
“If we think about providing strong economic opportunities and giving folks the ability to have access to capital or have a strong-paying job, you can begin to stop the snowball of the negative things and begin the snowball of the positive things, of having a savings account or being able to get a loan from a bank or a credit union like the St. Louis Community Credit Union, to start a business and to have something to pass on,” she said.
Creating generational wealth is Alexander’s plan by continuing to build affordable housing in his community. He plans to apply for at least $1 million in capital through the credit union this year to help complete 18 new and rehabbed homes in north St. Louis by the end of the year.
“I'm hoping that this becomes legacy building for families,” he said. “This opportunity will give some their chance at a first home. For some, this may be their second home, but they're looking to make it an asset-building tool.”
