Funding for small businesses in Georgia gets a boost
Organizations across Georgia are working to improve access to capital for small and diverse businesses. According to the U.S. Department of Commerce, minority-owned businesses are more likely to forgo applying for loans for fear of rejection, less likely to receive them when they do apply, and more likely to pay higher interest rates on business loans compared to their non-minority counterparts. One tool they are using to increase loan outcomes are CDFIs.
What is a CDFI?
The Community Development Financial Institutions (CDFIs) are mission-driven financial institutions that have been certified by the U.S. Department of the Treasury's CDFI Fund. CDFI’s include credit unions, banks, loan funds, and venture capital funds with a primary mission of serving low-income communities (https://www.cdfifund.gov/).
CDFIs in Georgia
The potential for CDFIs to support diverse businesses in Georgia has increased recently in part to support from federal and private sector investments. This year, the Georgia's State Small Business Credit Initiative is expanding its partnership with lenders after its program received $200 million in federal funds; $60 million being allocated to the CDFI program.
Additionally, private institutions are stepping forward to help community-focused lenders and their missions. Organizations like Georgia Power have been longtime partners of Access to Capital for Entrepreneurs, ACE, and recently Truist Foundation has gifted ACE with its largest grant to date - $3.75 million.
Access to Capital for Entrepreneurs (ACE) is a non-profit that catalyzes entrepreneurial growth through financing and education. Over the past twenty years, ACE has grown to be one of the largest non-profits in Georgia; providing $169+ million in loans. In 2021, 90% of ACE’s loans were to members of under-served populations, low-to-moderate income, African American, Hispanic, and/or women-owned businesses.
The grant from Truist will help ACE expand their funding and business support services in South Georgia.
Find a resources like ACE and other statewide providers focused on small and minority-owned businesses at https://growgeorgia.com/grow/funding/.