The founder of G&C Equipment Corp., which for 40 years has been leasing and selling construction equipment in the city, Hale also started the Greater Los Angeles African American Chamber of Commerce.
With G&C, Hale has helped shape some of L.A.’s most prominent landmarks. Equipment leased or sold by his firm can be found on the construction sites at SoFi Stadium and the surrounding Hollywood Park entertainment and residential district, as well as at the Exposition Park construction site of the Lucas Museum of Narrative Art.
And with the GLAAACC, Hale developed a local organization that gave a voice to local Black business owners. The organization now has 500 members, including roughly 100 large corporate members.
Hale, 65, talked with the Business Journal about the state of Black businesses in Los Angeles in an era marked by Covid-19 and social justice protests. He also discussed the travails of securing financing for his own fledgling construction equipment business nearly 40 years ago and how much — or how little — has changed since then for Black business owners.
What impact has the Covid-19 pandemic had on your construction equipment leasing and sales business?
At first, the only impact was the measures we had to take internally to make sure our employees were protected. Our revenue wasn’t impacted because we had a hefty backlog of lease orders and work on many of the projects our clients were doing was not interrupted. So, our revenue stayed flat or even increased a little bit.
And more recently?
We’ve been going through our backlog and since Covid hit, there haven’t been many new orders coming in. That means our project pipeline has been dwindling, so our revenue in recent months has been dropping. Also, since we’ve been working remotely, we’re paying rent on an office facility we’re not using.
What steps have you taken to ensure the business survives?
We’ve cut expenses, delayed our own capital purchases, put off any salary increases or bonuses. We’ve also increased our marketing efforts and redoubled our efforts at keeping in touch with our clients. As a businessperson, I’m now concerned we have to work harder to find where the projects are. We’re hoping for an upturn in the industry this summer.
What kind of impact has the pandemic had on L.A.’s Black businesses community?
It has not been a great situation for black businesses. Roughly 90% of Black- and minority-owned businesses were shut out of the initial PUA (Pandemic Unemployment Assistance) and PPP (Paycheck Protection Program) programs. Most banks preferred to deal with known customers. Nationally, about 40% of Black-owned businesses permanently shut down as a result of the pandemic; although, I’m not aware of any figures for Los Angeles, I would expect we are pretty much in line with that figure.
Really? That high a percentage have permanently closed?
Yes. At first, some of the Black-owned business owners that I talked to tried to pivot their business. But then came the second shutdown in the summer. And then the third shutdown after Thanksgiving didn’t help at all.
Have measures coming out of Washington or Sacramento helped?
There is legislation from Congresswoman (Maxine) Waters (D-Hawthorne) that should help alleviate this by allocating some of the PPP money to Small Business Development Centers to make loans. I see this helping in future rounds of assistance. It would get around the problem of not having established relatioships with banks.
What about any new measures from the Biden administration?
He made a lot of promises during the campaign. But he needs to find ways to advance economic mobility. And then for small businesses, he needs to increase their access to capital.
We have to double funding for Small Business Development Centers. And he needs to help expand SBA (Small Business Administration) programs that support African American businesses.
Are you optimistic Biden and his administration can get these things done?
We are optimistic to a degree. I’ve been looking at his appointees, and they are diverse. That helps ensure that we have a supportive voice at the table when these programs are being considered. But the obstacle will likely come from gridlock and intraparty fighting. That’s the real challenge.
How did you start G&C Equipment Corp.?
I was a financial analyst working for one of the large financial institutions on Wall Street, CIT. They moved their office to Pasadena, and I went with them. My job there was financing equipment leases on a project-by-project basis for large companies, such as Bechtel. But I wanted to start my own business leasing construction equipment.
So that’s when you launched your own business?
Not immediately. First, I decided I needed to get some experience working with and learning about construction equipment, so I joined a tractor company for a couple years. Then I was ready to start my own business. I visited some of the construction companies I had done finance deals with and sought them out as customers for my new business. I formally launched the company in 1981.
How did you finance this venture?
It was just me at first. I grew the company bit by bit, leasing deal by leasing deal, first focusing on the prime contractors doing the construction work. Then, after a couple years, I realized I need some additional capital to grow the company. So, I went to Broadway Federal Bank, which at the time (in the mid-1980s) was one of the only banks in Los Angeles making loans to Black businesspeople.
Did you try going to any other banks?
I made some preliminary inquiries at other banks but got nowhere. So, Broadway Federal was the only place I could go to. But getting that loan was very problematic.
Why?
The Broadway team liked my ability to present my own financial statements in a clear fashion — that was a skill I picked up making all those equipment leases. But they were concerned that I had such a new business. And it was one of their first loans in the commercial area — they previously had strictly been a savings and loan institution. So, they were learning as I was. I was glad they were willing to take a chance on me.
Is it still as challenging for Black entrepreneurs to get loans?
I think it’s a little easier now. Most of the prime contractors and project developers now have diversity goals where they have to reach out to minority-owned, women-owned and disabled veteran-owned businesses for a certain percentage of their subcontract volume. That didn’t exist 40 years ago when I was trying to get a loan.
What makes it more challenging now to get a loan than 40 years ago?
In my line of business, construction equipment financing, there are now requirements to bond the equipment you are selling or leasing, in case that equipment doesn’t come through when the client needs it. That didn’t exist before. We’re an established business, so it hasn’t been too much of a challenge for us. But if you’re just starting an equipment leasing or sales company today and don’t have that track record, that could be a real challenge.
Have you had any offers to buy your business?
I’ve had a substantial number of companies wanting to buy my business. At first, I was too young to sell — I wanted to keep doing this. Later on, the options became a bit more attractive, but I still haven’t come across the right match.
What led you to start the Greater Los Angeles African American Chamber of Commerce in the 1990s?
I looked around at all the development of the city (Los Angeles) that was going on. I didn’t see too many African American businesses involved in the boom. Especially in the world I was in, which was development and infrastructure building. Black business owners didn’t really have a voice at the table.
But there was the Black Business Association, right?
Yes, we did have the Black Business Association. But at the time, the BBA was more focused on working with large companies to improve minority representation and minority hiring within those large companies. That was very much needed. But what was also needed were government policies that opened up contracting opportunities across the board. No one out there at the time was doing this. Also, we needed at the time some open channels to Republicans (who had just taken over Congress in the 1994 mid-term elections). The BBA’s ties were mostly with Democratic officials. Besides, there was room — and still is — for more than one voice representing the Black business community.
How many members does the Greater Los Angeles African American Chamber have today? And has that roster been growing in recent years?
We have about 500 members, including about 100 corporate members. We did see some membership growth last summer as a result of the protests after the George Floyd killing. Some of the new corporate members to join were looking to set up diversity and inclusion programs, and were looking for some guidance from the GLAAACC. This year, we want to continue to build out our membership roster.
What other initiatives is the chamber working on now?
We have a business mentoring program where each year, we take about 15 member business owners and get them connected to mentoring opportunities in large corporations. We’re also looking at workforce development programs and increasing the number of Black women in the C-suite.
