"When we come out of the crisis, who is going to be lending to businesses that are owned by women and people of color?" asks Klein. Banks have tightened their credit standards and it will take a while before they return to previous levels. The Federal government has approved $12 billion in funding to CDFIs and Minority Designated Institutions as part of its $900 billion.
"Create a facility where banks would sell to the Fed Equity Equivalent Investments .* It's an investment vehicle that expands sources of equity capital for CDFIs. Unlike for-profit corporations that can raise equity by issuing stock, nonprofits have traditionally built their capital base through contributions, philanthropic sources, or through the accumulation of retained earnings. An EQ2 is a long-term, deeply subordinated loan with features that make it function like equity.
If we are going to close the gap in funding to minority- and women-owned business, CDFIs not only need more funding but underestimated entrepreneurs need to know about this affordable source of capital.Access to markets is critical to all businesses. Having customers who spend billions on goods and services, such as the Fortune 1000 or government agencies, increases your chances for high growth.
Both WIPP and The National Women's Business Council strongly support this act. NWBC is a federal advisory committee established to serve as an independent source of advice and policy recommendations for the President, the US Congress, and the US Small Business Administration on issues of importance to women business owners and entrepreneurs. Waterman is optimistic that it will pass this year.
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