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Bank Hispanics Form Alianza
The venture capital initiative, known as the Alianza program, was unveiled locally last week in a presentation given by Bank One and the Great Lakes Hispanic Chamber of Commerce (GLHCC) at the Eberhard Center downtown.
Alianza, Spanish for “Alliance,” originated in February 2000 as a joint effort between the U.S. Hispanic Chamber of Commerce (USHCC) and Bank One to increase access to capital and credit for Hispanic businesses.
The USHCC is a 300,000-member organization that promotes economic development and growth through a network of 200 local chambers.
“Bank One’s investment in Alianza didn’t happen overnight,” said Jeri Atkins, Bank One’s vice president for business banking in Denver, Colo.
“This commitment is a deliberate approach and something we worked hard at,” she said, outlining several initiatives Bank One has undertaken over the past 17 years on behalf of the Hispanic community.
Program guidelines require companies participating in the fund to have a minimum of 51 percent Hispanic ownership and annual revenues of at least $4 million.
According to Bank One, the fund’s investment strategy is to focus on transactions of $5 million to $15 million within the middle market segment of the Hispanic business community.
As lead investor, Bank One has capitalized the proprietary fund with an initial $5 million. Additionally, the bank helped raise another $5 million to grow the ultimate size of the fund, she said. Bank One designed the fund to become self-sustaining.
Verizon Wireless also donated $10 million towards the fund’s capitalization, raising the ante to $20 million.
Atkins said the venture capital fund is expected to be in operation in early July, at which time applications will begin to be accepted.
The Hispanic population is one of the fastest growing influences on the American landscape, she pointed out, and Hispanic markets are exploding all over the country.
Current estimates indicate there are some 1.7 million Hispanic entrepreneurs in the U.S. today, and that number is growing at the rate of about 17 percent per year.
Those 1.7 million entrepreneurs now generate gross revenues approaching $200 billion, and that figure is growing at a rate of more than 34 percent a year, Atkins said.
Within 10 years, it’s expected the U.S. Hispanic population will grow by 35 percent and its purchasing power will more than double.
Today there are 30 million Hispanic Americans whose collective purchasing power is $325 billion.
It’s projected that by 2025, Hispanics will be the largest minority segment in the U.S., with a population exceeding 40 million. By then, their purchasing power will likely top $850 billion, Atkins noted.
Alianza is made up of three key components: a dedicated venture capital fund; a financial rewards program called Affinity Rewards; and a USHCC-branded platinum business credit card.
Whereas banking industry rewards programs have historically focused only on credit card purchases, Alianza’s Affinity Rewards program awards dollars for existing balances, new accounts and loan deposits as well, Atkins explained.
The branded credit card offers discounts, has no annual fee, and it’s use returns reward dollars to the USHCC for delivery of local educational workshops on business mentoring, e-commerce and how to access traditional and alternative sources of funding .
Like the national Hispanic chamber, the GLHCC’s goal is to enhance the Hispanic business community’s economic development and growth potential through educational programs and contractual opportunities.
Formed last November, the fledgling GLHCC serves Allegan, Kent, Muskegon, Newaygo, Ottawa and Van Buren counties. It’s an affiliate of the Michigan Hispanic Chamber of Commerce.
Joe Garza, GLHCC interim chairman, said marketers are aggressively seeking connections with the rapidly growing Hispanic market.
Whether from Mexico, the Dominican Republic or Puerto Rico, Hispanics are more likely to want to deal with people in the marketplace who understand their language and have patience and respect for Hispanic culture, Garza said.
The GLHCC gives Hispanic entrepreneurs the opportunity to speak with one voice, as well as enjoy the benefit of lobbying efforts on their behalf.
“But we have to have numbers to do that,” Garza said, encouraging those present to join the chamber. “It’s going to help not just the Hispanic community, but the community at large.”
Bill Bruinsma, Bank One’s market manager for business banking in West Michigan, said the bank’s involvement with the GLCC is not unique to West Michigan, and that the Alianza program is the most tangible evidence of Bank One’s commitment to Hispanic businesses and chambers nationwide.
Of Bank One’s 1,800 banking centers nationwide, 230 centers are in predominantly Hispanic communities.
Bank One will provide “resource entities” throughout banking centers, connecting Hispanic business owners to resources that weren’t available to them five to 10 years ago. In addition, the company has bilingual phone bankers on staff during regular weekday business hours.
Last year, USHCC named Bank One as “Corporate Partner of the Year.” Furthermore, Atkins pointed out, Hispanic Business magazine ranked the company No. 1 among financial institutions and among the top 10 American corporations in regard to the number of Hispanic executives on staff.
“It’s a privilege to do business in the Hispanic community and it’s a privilege Bank One does not take for granted,” she added.
As part of the program, Bank One has produced a new series of checks titled “Nuestra Musica,” which is Spanish for “Our Music.” The series, designed by artist Ann Trevino of Irving, Texas, honors Mariachi, Tejano, Caribbean and International music.