Access to capital continues to be a major challenge to African American and Hispanic small business owners.
There are more than 8 million minority-owned small businesses in the U.S., accounting for $1.3 trillion in annual sales of goods and services, according to the U.S. Small Business Administration (SBA). The SBA reports that 30% of minorities feel discouraged from seeking private loans to help them grow, in part because they are disproportionately denied capital by traditional financial institutions.
Some lending companies are working overtime to put loan programs in place to help underserved entrepreneurs. Case in point is CDC Small Business Finance, which recently established a new Community Development Financial Institution (CDFI) fund to assist small business owners in underserved neighborhoods of greater Los Angeles.
Financing veteran Antonio Pizano is working one-on-one with African American and Hispanic small business owners in economically distressed areas of Los Angeles. He will help them gain access to financing not typically available from traditional financial sources. Pizano’s team will include loan underwriter and credit expert Joanne Dao.
“We’re committed to making an impact by getting capital into the hands of small business entrepreneurs who’ve historically been unable to obtain affordable financing,” said Robert Villarreal, president of the new CDFI fund. “We want to educate small business owners about lending options in the marketplace so they choose wisely for the sustained growth of their companies.”
As CDC Small Business Finance and other CDFIs across the country connect with underserved communities, small business owners will gain access to capital and be able to achieve their vision for their business, employees and community.
Throughout the year we will share updates on the amount of capital being deployed to underserved entrepreneurs and how CDFIs are creating positive change and opportunity for small business owners.