Are you an underserved or minority small business owner? A new fund is being launched that could help

By Rieva Lesonsky

Access to capital is one of the biggest challenges small business owners face, and minority-owned businesses do not have equal access to credit or capital. But there is relief in sight.

The New York Times reported that giant Macy's will invest $30 million over the next five years "to support companies led by people from underrepresented groups in the industry. retail". Target is continuing its commitment to spend $2 billion with Black-owned businesses by 2025. Sephora and other companies have pledged to dedicate a percentage of storage space to minority-owned businesses.

And a few months ago, Hello Alice and the Global Entrepreneurship Network (GEN) launched a $70 million Fair Access Fund, with seed funding led by Wells Fargo. The fund is part of the Equitable Access Program, providing "increased access to credit and financial education" to underserved entrepreneurs.

I recently spoke to Elizabeth Gore, President and CEO of Hello Alice, about the fund.

Rieva Lesonsky: Tell us about the new $70 million Fair Access Fund launched by Hello Alice with the Global Entrepreneurship Network.

Elizabeth Gore: The Equitable Access Fund (EAF) is part of the Equitable Access Program (EAP), which provides access to credit and financial education to promising and historically underserved entrepreneurs within the " New Majority", which includes people of color. , women, members of the LGBTQ+ community, immigrants, veterans, and small business owners with disabilities.

Access to credit remains an important issue for entrepreneurs. Estimates indicate that [minority-owned] business owners have approximately $40 billion in unmet funding demand, while all small businesses nationwide have $1 trillion in unmet funding demand. satisfied. The EAF will provide credit enhancements, such as guarantees and loan loss reserves, to financial partners of Hello Alice. This will allow financial partners to provide credit to disadvantaged small business owners who would not otherwise be able to access it.

And these improvements will help many small business owners get their first-ever business credit card through the Hello Alice Small Business Mastercard program. Once a business has demonstrated the performance of the credit or loan product, the money held as credit enhancement will be released and recycled to other business owners, creating a virtuous circle.

Applicants will be selected based on their personal and professional credit history and business characteristics. Eligibility for financing products supported by the FEA...