0% Interest Microloans up to $10,000 for all stages of business ownership including startups.
A new resource for Black, Indigenous, People of Color (BIPOC) entrepreneurs and business owners.
Applications to open now thru August 20, 2021
APPLICATIONS ARE OPEN: July 19- August 20 at noon.
Before you go to the application, be sure to read about the program's why, what, and how below:
This loan fund rose out of a desire of Community Investment Corporation’s (CIC) staff wanting to take concrete and tangible action in the wake of recent and ongoing national tragedies and calls for racial equity and justice. In partnership with BLAX Friday and Startup Tucson, with funding from Tucson Electric Power, Cox Communications and BBVA, and supported by Growth Partners Arizona and the Tucson Metro Chamber, CIC is shifting decision-making to the BIPOC community about where (geographically), to whom (communities of color underserved by financial institutions and systems), and under what circumstances (measures of risk) capital flows.
Defining the problem:
* (Indigenous families wealth has not been measured since 2000 but was lower than Black families at that time)
Access to debt and investment capital favors those who already have wealth, which further exacerbates the racial and ethnic business ownership gap.
Race-based legislation, public policies, and business practices of the past, especially those related to housing (i.e. segregation, exclusionary zoning, redlining) are at the root of persisting racial and ethnic wealth and business ownership gaps in our country. According to a U.S. Department of Commerce report, capital access remains “the most important factor limiting the establishment, expansion and growth of minority-owned businesses.”
Regardless of intent, in practice our financial systems have placed a greater burden on minority entrepreneurs than their non-minority counterparts; proof which is seen in the enormous gap between minority-owned business.
BUILDING A SOLUTION
Meet the Committee:
Since January of 2021 the BIPOC CMLF Committee has been meeting biweekly to reimagine lending, discuss barriers to capital access for BIPOC communities, and design a transparent process that meets entrepreneurs/business owners where they are with the goal of helping them take the next big step in their business growth. The committee discussed current lending practices, defined historic and current barriers for BIPOC entrepreneurs and business owners to capital access, and built an application and program process that aspires to eliminate barriers and welcome our BIPOC communities’ to tap into this funding resource.
To offer 0% interest loan funding to BIPOC identifying entrepreneurs and business owner, bridging the capital access gap. This funding will come from an established “revolving loan fund” housed and managed by CIC. Revolving loan funds are self-replenishing pools of money, typically utilizing interest and principal payments from existing loans to fund new ones. Because the initial loans from this fund will be originated at zero interest, the fund will rely on financial and in-kind support from CIC. Funding for the inaugural BIPOC loan has been generated by CIC with all current staff making personal contributions. Corporate gifts have been generously provided by Tucson Electric Power, Cox Communications and BBVA.
This loan fund has $100,000 and CIC is also actively fundraising to grow the pool of available funds. After reaching the initial goal of raising $100,000 for distribution, sights are set on building the fund to $1,000,000 over the next three years. All repayment of loans will be reinvested in the fund – these funds may be loaned out with nominal interest in the future to help offset administrative costs of managing the fund.
- Design a transparent process that meets entrepreneurs/business owners where they and helps them bridge the gap to where they want to be through capital access, education, and resources.
- Focus on building community connections, expanding resources and knowledge around capital access to create systems change that concretely addresses gaps of traditional lending institutions in funding BIPOC entrepreneurs.
- Create a customer/applicant journey that is comfortable, personal and relational with aspirations of a familial vibe.
- Create a roadmap for entrepreneurs to move from this community loan product to additional capital access through traditional lending institutions.
- Provide next-level service which is intentional, authentic, includes mentoring, and makes applicants feel like more than a number.
Program Details: At least 50% of business ownership must identify as BIPOC.
This program is designed to build community and connection. Different than other CIC loan products that offer rolling applications, there is a clearly defined timeline of deadlines and events that must be followed to receive funding.
- Benefits of the Cohort approach include:
- Building Community and Connection
- Allows for a clear timeline for application, review, etc.
- Helps with program assessment and feedback