Key to Growth and Scaling for Diverse Business Owners

Access to capital is crucial for launching and sustaining a small business. From purchasing equipment, inventory, and technology, to hiring staff and managing unexpected expenses, flexible and affordable capital is essential.

But for many underserved entrepreneurs, obtaining this capital is an uphill battle. They often face considerable challenges in accessing the funds needed to start and grow their businesses, including limited access to startup funding, higher interest rates, and more stringent underwriting requirements. Studies have shown that diverse business owners have fewer collateral options and banking relationships, making it even harder to secure loans.

Racial biases continue to influence loan approvals for diverse business owners. A study published in the Journal of Marketing Research found that even with stronger financial profiles, Black business owners have a more difficult time securing financing compared to white business owners. Similarly, Latino-owned businesses with better credit scores and lower outstanding debt often have lower approval rates for business loans versus white-owned businesses.

The Center is committed to addressing these disparities by providing education, technical assistance, and access to competitive financing for underserved small business owners. Together with our strategic partners, we aim to close the opportunity gap created by historical and systemic financial biases.

One of our key initiatives to promote equitable lending is the Equitable Lending Learning Series, created in partnership with the Council of Development Finance Agencies (CDFA) and Lendistry. This four-part series is designed to equip development finance professionals with the knowledge and tools needed to support organizations that struggle to secure financing. Our collective commitment is to ensure that diverse small businesses can access affordable capital.

The upcoming session, “Strategic Partnerships for Sharing Financial Risk,” will take place on Tuesday, July 23, from 1:00 to 3:00 PM Eastern. During this session, we will discuss identifying strategic partners when implementing equitable lending programs, approaches for establishing solid relationships across organizations, and the various finance tools available to reduce risk exposure. The conversation will explore how leveraging the strengths and expertise of various capital partners, technical assistance providers, and philanthropic supporters can help build successful and sustainable programs.

By participating in the Equitable Lending Learning Series, professionals will be better prepared to support diverse business owners, helping to close the racial wealth gap and fostering economic growth in communities. The Center by Lendistry is proud to be at the forefront of this crucial work.

Join us in our mission to create a more inclusive and equitable financial landscape. Learn more about the Equitable Lending Learning Series and register today to be part of the change.