Removing Constraints to an Inclusive Washington — Washington African American Chamber of Commerce
- Issuer
- Congressional materials
- Document type
- 2023 10 06 A31385 D262750 Waacoc Removing Constraints To An Inclusive Washington Infra
- Date
- 2023-10-06
- Case
- 2023 10 06 A31385 D262750 Waacoc Removing Constraints To An Inclusive Washington Infra
Summary
A slide presentation by the economic development chair of the Washington African American Chamber of Commerce for Panel 3: Future Opportunity before the House Innovation, Community & Economic Development, & Veterans Committee, with slides dated 10/5/2023. It describes the chamber's work with BIPOC and SEDI businesses and lists top reasons for business closures, including 30% lack of capital. The slides cite lending resources such as SBA 7(a) loans, microloans and $163M through the WA Small Business Credit Initiative, and data points on loan denials and PPP applications among BIPOC business owners. The presentation proposes a new agency to review applications before they reach lending partners and coach applicants not approved, and yearly monitoring of lenders' lending to the BIPOC community.
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Full text
Washington State House of
Representatives
Office of Program Research
Innovation, Community &
Economic Development, &
Veterans Committee
Eric Fitzgerald
Economic Development Chair
Washington African American
Chamber of Commerce
509-572-6966
Panel 3: Future Opportunity efitzgerald@wowtricities.com
Eric Fitzgerald
Economic Development Chair
The Washington African American Chamber of Commerce is committed to
serving the Black Indigenous People of Color (BIPOC) and Socially and
Economically Disadvantaged Individual (SEDI) Businesses in rural and
urban communities through access to education, technical assistance,
advocacy and economic development.
WAACOC actively promotes the expansion of business opportunities and
economic development on behalf of its members and the community.
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Striving to Close the Community Resource Divide
by ensuring adequate investment in these areas
Within the statistical data of numerous websites, such as the SBA, or
Commerce’s MyStartup365.com, and others the top reasons for Business
Closures is attributed to:
• 30% Lack Capital
• 23% Lack of Financial Knowledge
• 17% Lack a Clear Business Model*
*w/o understanding value and pricing it difficult at best to develop a clear business model.
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Striving to Close the Community Resource Divide
by ensuring adequate investment in these areas
U.S. Small Business Administration
• 7(a) loans
• microloans
“Approval Agency”
WA Small Business Credit Initiative
• $163M – Entrepreneur ownership,
increasing capital in underserved
communities
MBDA - Mentoring
Others
*Lending 4.4% 7(a) went to black applicants
Partners
0.43% Venture capital provided to Women
Addressing the Lack of Capital
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Striving to Close the Community Resource Divide
by ensuring adequate investment in these areas
~45% of BIPOC business owners are more likely to
be denied loans
WA Small Business Credit Initiative ~40% BIPOC Small Business owners didn’t apply for
“Approval Agency”
• $163M – Entrepreneur
PPP believing their applications would be denied
ownership, increasing capital
in underserved communities
~43% of White low risk business owners received
U.S. Small Business Administration the full funding requested compared to ~25% of
• 7(a) loans BIPOC applicants who were also considered low
• microloans risk
MBDA
Others
*Lending 4.4% 7(a) went to black applicants
Partners
0.43% Venture capital provided to Women
Addressing the Lack of Capital
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Striving to Close the Community Resource Divide
by ensuring adequate investment in these areas
Recent data points
from the PPP
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Striving to Close the Community Resource Divide
by ensuring adequate investment in these areas
BIPOC/SEDI businesses are often financed through combinations of less
than favorable financial institutions and family members.
“Black* owned businesses had the lowest percent of survival rate for
employer establishments” U.S. Small Business Administration Office of Advocacy
“Black* small business owners were also the most likely to experience
difficulty accessing credit” Brookings Institution
*Although this data was specifically for Black small businesses, Numbers for the BIPOC/SEDI members were similar.
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Striving to Close the Community Resource Divide
by ensuring adequate investment in these areas
1. Remove the ‘closed’ door process of rejection with no path
forward:
WA Small Business Credit Initiative
• $163M – Entrepreneur ownership,
• Creation of a new Agency/Department assigned to
review applicant packages prior to going to the ’Lending
“Approval Agency”
increasing capital in underserved
communities Partner’
U.S. Small Business Administration • Approved applications are sent to the lending partner for
• 7(a) loans review.
• microloans • Applicants not immediately approved are coached and
MBDA given plans to address the reason(s) for disapproval.
Others
*Lending 4.4% 7(a) went to black applicants
Partners
0.43% Venture capital provided to Women
Addressing the Lack of Capital
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Striving to Close the Community Resource Divide
by ensuring adequate investment in these areas
2. Lenders within program are to be monitored year over year
for improved lending practices. Those not showing favorable
increases in the lending rates to the BIPOC community should
be removed from the list of “favorable lenders”, “Lending
Partners”.
WA Small Business Credit
Initiative • Rejected applications should be return to the
• $163M – Entrepreneur agency/individual for plan development, the doors to
ownership, increase
“Approval
yes.
capital in underserved
communities
Agency”
WA Small Business Credit
Initiative
• 7(a) loans
• microloans
MBDA *Lending 4.4% 7(a) went to black applicants
Partners 0.43% Venture capital provided to Women
Others
Addressing the Lack of Capital within the BIPOC Entrepreneural community
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Striving to Close the Community Resource Divide
Remove the Divide between the Community and
the Resource
Questions
Eric Fitzgerald
Economic Development Chair
Washington African American Chamber of Commerce
509-572-6966
efitzgerald@wowtricities.com
11 10/5/2023 Add a footer
File and source
- File
- 2023-10-06_a31385_d262750_waacoc-removing-constraints-to-an-inclusive-washington-infra.pdf
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- 921,911 bytes
- SHA-256
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- Original
- app.leg.wa.gov