The Local Initiatives Support Corporation (LISC) announced that the Entrepreneurs of Color Fund (EOCF) has surpassed its $500 million goal in small business lending, more than two years ahead of schedule.
With this achievement, LISC is doubling its ambition, setting a new benchmark of $1 billion in financing to support underserved businesses and communities across the US.
Expanding Access to Capital for Minority Entrepreneurs
The EOCF addresses capital gaps faced by minority-owned businesses, which often struggle to secure funding.
Black and Latino entrepreneurs, in particular, are denied loans at twice the rate of their white counterparts, according to the Federal Reserve.
The program partners with 24 community development financial institutions (CDFIs) in 10 major cities, including Atlanta, Detroit, and Los Angeles, to provide grants, loans, and technical assistance.
Since its inception, the fund has facilitated over 9,500 loans, empowering small businesses in sectors like retail, manufacturing, and transportation.
LISC’s initiative not only fuels business growth but also enhances community development.
“The $500 million deployed so far is an investment in local wealth-building,” said Steve Hall, LISC’s Vice President of Small Business Lending.
He emphasized that the funds enable entrepreneurs to buy property, expand operations, and create jobs, benefiting both businesses and the communities they serve.
Closing the Gap in Small Business Financing
The success of the EOCF highlights the potential for fair and inclusive lending practices to transform communities.
Survey data from EOCF reveals that 3 in 5 (62%) businesses that received loans expanded their workforce, while over half (55%) reported revenue growth.
Additionally, 4 in 5 (82%) borrowers with low credit scores saw improvements, positioning them for future conventional financing.”
Additionally, 82% of borrowers with low credit scores saw improvements, positioning them for future conventional financing.
Supported by major backers like JPMorgan Chase and the W.K. Kellogg Foundation, the fund began in Detroit in 2015 and has since expanded nationwide under LISC’s management.
Feature Image Credit: Getty Images
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