By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
AmextaFinanceAmextaFinance
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Notification Show More
Aa
AmextaFinanceAmextaFinance
Aa
  • Banking
  • Credit Cards
  • Loans
  • Dept Management
  • Mortgage
  • Markets
  • Investing
  • Small Business
  • Videos
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Follow US
AmextaFinance > Small Business > Are You A Minority Small Business Owner? A New Fund Could Help
Small Business

Are You A Minority Small Business Owner? A New Fund Could Help

News Room
Last updated: 2023/08/14 at 2:50 PM
By News Room
Share
6 Min Read
SHARE

By Rieva Lesonsky

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

The New York Times reported that corporate giant Macy’s will invest $30 million in the next five years “to support businesses run by people from underrepresented groups in the retail industry.” Target continues with its commitment to spend $2 billion with Black-owned businesses by 2025. Sephora and other companies have promised to dedicate a percentage of shelf space to minority-owned businesses.

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

I recently talked to Elizabeth Gore, the president and CEO of Hello Alice, about the fund.

Rieva Lesonsky: Tell us more about the new $70 million Equitable Access Fund Hello Alice launched 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 a significant problem for entrepreneurs. Estimates indicate that [minority-owned] business owners have around $40 billion in unmet financing demand, while all small businesses nationally have $1 trillion in unmet financing demand. The EAF will grant credit enhancements, such as guarantees and loan loss reserves, to Hello Alice financing partners. This will enable the financing partners to supply credit to disadvantaged small business owners who could not access it otherwise.

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

Applicants will be selected based on personal and business credit history and business characteristics. The eligibility for EAF-supported financing products is more accessible than the financing partners’ traditional eligibility parameters. Payment history will be reported to business credit bureaus, which will help business owners build a business credit profile. This can reduce their reliance on personal credit, personal guarantees, and predatory loans—resulting in greater financial freedom and less risk to them and their families.

Lesonsky: How can small business owners participate?

Gore: Any small business owner is eligible to benefit from the EAF. The first step is to sign up for Hello Alice (it’s free). Hello Alice users (90% are categorized as New Majority members) then submit an application for financing solutions, including the Hello Alice Small Business Mastercard. Then, GEN, Hello Alice, and the financing partners will determine eligibility based on information submitted in financing applications.

More articles from AllBusiness.com:

Lesonsky: Since these business owners are traditionally underfunded, will the lending parameters be different?

Gore: Yes, the EAF was specifically designed to raise financing partners’ ability to increase access to credit products and services. As a result, eligibility criteria are much more accessible than their traditional lending parameters, as their risk tolerance for loans increases.

Lesonsky: Any ideas on how many small businesses you can reach and help?

Gore: Our goal is to unlock up to $1 billion in credit access over the next five years, which could help thousands of small businesses grow and improve their financial health. The ultimate number of businesses reached will depend on the average size of financing businesses receive.

Lesonsky: I understand that small business owners will be provided credit-building education and technical assistance as part of the program. Can you tell me about that?

Gore: We launched the Business Health Score last April. It’s an assessment tool that provides a comprehensive overview of a business’s financial health. This allows small business owners to make informed decisions about improving their financial performance and achieving long-term success through a real-time recommendation engine. Both the score and the fund enable banks to better serve small businesses and demonstrate the lucrative value of investing in the New Majority.

Writer’s note: Business credit card statistics underscore how deep the need is for small business owners to get a card. According to data from Hello Alice, while 90% of small business owners without business credit believe a business credit card would positively impact their businesses, only 25% have even applied for a business credit card, and 85% of those applications were denied due to poor credit or lack of credit.

About the Author

Rieva Lesonsky is CEO of GrowBiz Media and SmallBusinessCurrents.com and has been covering small businesses and entrepreneurship for over 30 years. Get more insights about business trends by signing up for her free Currents newsletter.

RELATED: The Future For Women Entrepreneurs Is Bright—But Financial Challenges Remain

Read the full article here

News Room August 14, 2023 August 14, 2023
Share this Article
Facebook Twitter Copy Link Print
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Finance Weekly Newsletter

Join now for the latest news, tips, and analysis about personal finance, credit cards, dept management, and many more from our experts.
Join Now
Hong Kong listings pipeline hits record high as equity market booms

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects…

Gaza on brink of running out of fuel in Israeli siege

Fuel stocks in Gaza have been almost completely depleted, UN officials have…

Donald Trump’s tariff deadline looms

Hello and welcome to the working week.Anyone for taco? As all of…

Netanyahu and Trump to discuss new Gaza deal at White House

Unlock the White House Watch newsletter for freeYour guide to what Trump’s…

China reroutes exports via south-east Asia in bid to dodge Trump’s tariffs

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects…

- Advertisement -
Ad imageAd image

You Might Also Like

Small Business

Why Do We Stay In A Job When We Are Not Happy? Insights To Help You Get The Career You Deserve

By News Room
Small Business

Making A Large Language Model Transparent, Compliant And Reliable

By News Room
Small Business

The Important Initiative For Real Digital Marketing Results

By News Room
Small Business

The Future Of Real Estate

By News Room
Small Business

How AI Is Transforming Healthcare Risk Adjustment

By News Room
Small Business

How Do Hard Knocks Help? 5 Life-Changing Lessons Taught By Adversity

By News Room
Small Business

Lessons Learned From The World’s Most Successful Startups

By News Room
Small Business

Small Business Saturday Encourages Consumers To Shop Small And Local

By News Room
Facebook Twitter Pinterest Youtube Instagram
Company
  • Privacy Policy
  • Terms & Conditions
  • Press Release
  • Contact
  • Advertisement
More Info
  • Newsletter
  • Market Data
  • Credit Cards
  • Videos

Sign Up For Free

Subscribe to our newsletter and don't miss out on our programs, webinars and trainings.

I have read and agree to the terms & conditions
Join Community

2023 © Indepta.com. All Rights Reserved.

YOUR EMAIL HAS BEEN CONFIRMED.
THANK YOU!

Welcome Back!

Sign in to your account

Lost your password?