$12M Fund Launched For Minority-Owned Businesses In Southeast
If you’re a small, minority-owned business in Atlanta, Baltimore or Charlotte, there is a new financing initiative just for you.
The Charlotte-based UP Community Fund will make it easier for business owners of color to find small business loans. Designed to make capital more readily available to minority-owned businesses in the Southeast, the fund was launched in late May and plans to provide loans ranging from $250,000 to $1.2 million, the Charlotte Observer reported. The loans will be for up-to-three-year terms.
Urban Advisors, a fund manager based in Charlotte, partnered with Maryland-based investor Calvert Impact Capital to create the fund.
“We are excited to offer a flexible financing solution that has been specifically designed to meet the needs of entrepreneurs of color in the southeast region,” wrote David Sharp, managing partner of UP Community Fund and CEO of Urban Advisors, on the fund’s website. “UP Community Fund is a social justice solution that will make a difference to people and communities of low-to-moderate income.”
This $12 million-plus fund will be a great benefit for African American-owned businesses. Lack of capital for startups is a “key issue” for minority-owned businesses, especially for businesses owned by African Americans, according to a 2012 study by the Charlotte Chamber of Commerce.
“Minority business owners have a harder time accessing affordable credit than their non-minority peers, making it more difficult for minority-owned businesses to succeed and build wealth. Minority business owners apply for loans at approximately half the rate of non-minority business owners, and those that apply for loans face a declination rate almost three times that of their non-minority peers. Even when approved, minority borrowers receive rates that are 200 basis points higher than non-minority borrowers,” according to a press release.
Partners in the fund include Riverside Church, New Resource Bank, MetLife Investment Management, and Calvert Impact Capital.
“Our initial funders are not from the Southeast, but they saw a need and understood what the opportunity to fund this emerging, undercapitalized market in entrepreneurs of color,” said Sharp, a Morehouse College alum.
The fund will provide flexible loans, technical assistance, and advisory services. The loans can be used as “growth capital, general working capital, overhead or inventory expenses, refinancing debt and more,” Hypepotamus reported.
“The vision of the UP Community Fund is to create a sustainable financing vehicle that can generate focused and long-term impact in communities of color,” said Calvert Impact Capital’s VP of Syndications and Strategy Beth Bafford. “We are investing — and bringing other lenders to the table — because of the strength of the Fund’s mission and the team’s deep experience in lending to under-resourced communities. The UP Community Fund will create economic opportunity in a part of the U.S. that has historically lacked strong financing infrastructure.”