The Importance of Being a Black-Owned B Corp Startup — and Why More Financial Companies Should Become One
By Rodney Williams, Co-Founder and President of SoLo Funds
Some of the biggest and most successful businesses are Certified B Corporations, including Ben & Jerry’s, Patagonia, and Warby Parker. We learned about B Corps from one of our first investors, Richelieu Dennis, the founder of Sundial Brands and one of the early B Corp success stories. We didn’t want to become another tech company that gets consumed by growth and doesn’t fully address the issues we set out to solve. It’s hypocritical of “purpose-driven” tech startups to continue with the performative rhetoric and put profits above purpose.
In the tech and financial services industry, it’s unfortunate that we continue to see countless companies make lofty declarations around doing better for their community. These companies don’t live by what they preach. In other words, they don’t walk the talk. It’s all show and no action. I’ve bore witness to this for almost two decades now as a Black entrepreneur and co-founder of SoLo Funds, the largest community finance platform in the U.S., and before that, LISNR.
With SoLo, my co-founder, Travis Holoway, and I wanted to do things differently than our competitors and other big players in the financial space that failed to live up to their core company values and ambitious marketing. We officially became the first Black-owned B Corp fintech in the U.S. and Canada in December 2021. By doing this, we made a commitment to showing up and making a real impact for everyone by using business as a force for good as we operate and scale. Our current marketplace offers a solution for members who have the cash flow to either pay back or fund emergency loans. We’ve figured out how to provide value at a critical moment when someone needs a helping hand. Now we’re building an ecosystem around those members to fulfill our mission of financial autonomy.
Leaning into our mission of empowering borrowers and lenders, we commissioned our 2023 Cash Poor Report, which was an industry first analysis that revealed and compared the “junk fees” (over $25 billion) incurred by Americans living paycheck to paycheck, and what the true total cost of borrowing money is from financial institutions when using payday loans versus credit cards, fintechs, and BNPL apps. The goal of this is to ensure consumers become more aware of “junk fees” and the true total cost to borrow so that they are more likely to take action and make better-informed decisions. We’re going a step further and advocating that Congress and regulators address the inaccurate calculation of annual percentage rates (APRs) by adopting a new approach that we call the Total Cost Rate (TCR). The TCR isn’t meant to trick consumers but rather includes everything that a consumer pays in addition to the principal. Our members are making an impact for everyday Americans, and just last year, lenders on our app have delivered over $275 million directly to underbanked communities by funding over 1 million requests for everyday necessities.
So why are we the first Black-owned fintech to become a B Corp? It’s no secret we need more B Corp fintech companies, because in today’s financial landscape big banks and traditional players prioritize making money off cash-strapped communities. They don’t put nearly as much value and resources toward empowering them and ensuring their products are inclusive, accessible, and affordable. It’s an afterthought and it’s systematic. Big banks have always based their underwriting principles on providing resources for individuals who have money, not those without. Becoming a B Corp can alter the power dynamics and help change that.
Purpose-driven companies like SoLo Funds have a responsibility to right the wrongs and systems that have been successful at keeping underserved communities at bay. The time to do that is now. Our country is at a crisis economically, racially, and environmentally. Startups whose whole mission is around revolutionizing or democratizing outdated industries and creating a better life for future generations need to commit and join the B Corp community.
B The Change gathers and shares the voices from within the movement of people using business as a force for good and the community of Certified B Corporations. The opinions expressed do not necessarily reflect those of the nonprofit B Lab.
