Zero-Interest Microlending for Black-Owned Businesses

Income inequality

Expand existing project, program, or initiative (expanding and continuing ongoing, successful work)

Economic well-being is a key social determinant of any community’s health. Recent studies have shown that Black business owners are 2.4 times more likely to be denied financing than white business owners, and, furthermore, that Black entrepreneurs are almost three times more likely than white entrepreneurs to have profits negatively impacted by access to capital. Black business owners start their businesses on average with $35,000 in capital compared to white entrepreneurs who commence their businesses with $107,000. Therefore, access to capital remains a primary factor in shaping a Black business owner’s ability to address income inequality through creating and maintaining jobs, growing financial assets, and ensuring that their wealth-creation has positive impact generationally.

BCIF is seeking up to $75,000 to support its Zero-Interest Microlending for Black-Owned Businesses program. Specifically, the organization intends to strengthen its internal capacity to efficiently track and evaluate the following key performance indicators aligned with its growth strategy: (1) assist up to 70 percent of BCIF-funded businesses in maintaining and increasing their annual gross revenues; (2) aid up to 50 percent of BCIF-funded businesses in maintaining and increasing their number of jobs; and, (3) help up to 60 percent of BCIF-funded businesses receiving technical assistance and training through our organization demonstrate “loan readiness” as evidenced by: (a) a favorable number of loan approvals, (b) strengthened business competencies, (c) maintenance of current financials, etc. During the grant term, BCIF would utilize funds it has already secured as deployable capital to award five microloans of $10,000 each to local Black-owned businesses.

BCIF’s Zero-Interest Microlending for Black-Owned Businesses program is in direct alignment with LA2050’s income inequality primary issue. Launched in 2016, BCIF is a 501(c)3 organization that provides zero-interest microloans ($10,000 to $50,000) through pooled dollars to Black-owned businesses in Southern California – with recipients predominantly located in Los Angeles (70%), Riverside (15%), San Bernardino (10%) and Orange Counties (5%). 75% of the entrepreneurs and business owners we fund are Black women-led. With the lionshare of our recipients coming from LA County, LA’s local economy stands to be infused with more jobs and more opportunities for business owners who have been systematically blocked from access to capital. Our mission is to leverage the disbursement of these loans to raise awareness about the importance of economic empowerment, equity, and wealth building within the African American community.

Every 6 months, BCIF reports on the outcomes: (1) deploying loans to 100% of borrowers; (2) maintaining/ increasing annual gross revenues for at least 70% of borrowers; and (3) increasing the number of entrepreneurs/business owners served in LA. The methods used to collect and track these metrics entail collecting quantitative borrower outcome data via Excel sheets and qualitative borrower data via SurveyMonkey to collect anecdotal information and perspectives. All data collected is synthesized and maintained in a secure, password-protected Google Drive portal. We're on track to strengthen 60% of prospective applicants and/or recipients’ awarded a BCIF zero-interest microloan gross revenues and are on track to provide free training assistance via our underwriter and partners PCR Finance and AmPac Business Capital. To date, we've provided consulting services to 30 LA-based, Black-owned businesses for the reporting period 2/15/23-2/14/24. 103 consulting hours have been completed.