Originally published on April 22, 2016 on Politico by JP Morgan Chase & Co.
By supporting minority entrepreneurs who can’t get traditional funding, nonprofit community-development funds are transforming “micro businesses” into engines of economic growth.
For anyone aiming to start or expand a small business, one critical necessity trumps all the rest: the need for capital. And for people of color, that need has been growing more acute. During the economic expansion of 2002-2007, the Small Business Administration (SBA) increased its loans to African-American-run businesses by 60 percent, four times the rate of increase to Caucasian-owned firms. But after 2008, when the black community lost half its total wealth, SBA loans to African-American-run firms dropped by almost half, even as the SBA’s total loan volume increased by 25 percent.
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