Access to capital is a significant challenge for small business owners, particularly for minority-owned businesses. In this beginner’s guide, we will discuss various initiatives by major corporations and organizations to support these underrepresented entrepreneurs. We will also explore the $70 million Equitable Access Fund launched by Hello Alice and the Global Entrepreneurship Network (GEN) to address the financing needs of historically underserved entrepreneurs.
Major Corporations Taking Action
Several large corporations are stepping up to support minority-owned businesses. Here are some noteworthy initiatives:
1. Macy’s: Macy’s has pledged to invest $30 million over the next five years to support businesses run by people from underrepresented groups in the retail industry. This investment is expected to provide vital financial resources to minority-owned businesses seeking to grow and thrive.
2. Target: Target has committed to spending $2 billion with Black-owned businesses by 2025. This initiative aims to create economic opportunities and promote diversity within Target’s supply chain.
3. Sephora and Others: Sephora and other companies have made promises to dedicate a percentage of shelf space to minority-owned businesses. By providing this dedicated space, these companies are giving underrepresented entrepreneurs greater visibility and access to potential customers.
The Equitable Access Fund by Hello Alice and GEN
Recognizing the need for increased credit access and financial education for underserved entrepreneurs, Hello Alice and the Global Entrepreneurship Network have launched the Equitable Access Fund (EAF). Key details about this fund include:
– Amount: The EAF is a $70 million fund aimed at providing financial support to promising entrepreneurs from the “New Majority,” including people of color, women, LGBTQ+ community members, immigrants, veterans, and small business owners with disabilities.
– Credit Enhancements: The EAF offers credit enhancements such as guarantees and loan loss reserves to Hello Alice financing partners. These enhancements enable financing partners to provide credit to disadvantaged small business owners who would otherwise struggle to access it.
– Hello Alice Small Business Mastercard: Through the EAF, many small business owners can secure their first-ever business credit card through the Hello Alice Small Business Mastercard program. This program provides financial freedom and reduces reliance on personal credit, personal guarantees, and predatory loans.
– Eligibility: Small business owners are eligible to benefit from the EAF. To participate, they need to sign up for Hello Alice and submit an application for financing solutions, including the Hello Alice Small Business Mastercard. Determination of eligibility will be based on personal and business credit history, as well as business characteristics.
– Credit-Building Education and Technical Assistance: As part of the program, small business owners will receive credit-building education and technical assistance. These resources aim to improve their financial health, enhance their credit profiles, and empower them to make informed decisions for long-term success.
The Impact and Reach of the Equitable Access Fund
The Equitable Access Fund has the potential to unlock up to $1 billion in credit access over the next five years, benefiting thousands of small businesses. The ultimate number of businesses reached will depend on the average size of financing businesses receive. However, this initiative is expected to make a significant impact on the financial health and growth opportunities for underrepresented entrepreneurs.
Conclusion
Access to capital is critical for the success of small businesses, especially minority-owned businesses facing systemic challenges. With the initiatives undertaken by major corporations and the launch of the Equitable Access Fund, there is hope for improved access to credit and financial resources. By leveraging these opportunities and seeking assistance from organizations like Hello Alice and GEN, underrepresented entrepreneurs can overcome financial barriers, build strong credit profiles, and achieve long-term success.
