Sen. Mark Warner, D-Virginia and co-chair of the Community Development Finance Caucus, joined a venture capitalist, a community leader, and a young entrepreneur July 14 to lay out the challenges and solutions for starting and growing small businesses in a post-Covid 19 environment. Over 33 million small businesses make up about 99.9% of businesses in the US, and employ almost half of its workforce. During the Covid-19 pandemic, 40% of Black and Latino-owned businesses shut down, many permanently. Community Development Finance Institutions — CDFIs — were one of the keys to recovery, said Warner. “In a strange bedfellows kind of moment, I partnered strongly with then-Secretary Steve Mnuchin of the Trump administration during the COVID-19 pandemic to try to get a lot of capital into our minority depository institutions,” he said, at the news briefing organized by Ethnic Media Services. Warner and Mnuchin were able to distribute $12 billion in funding through CDFIs, Minority Depository Institutions — MDIs — and Tier 1 capital through a Treasury Department initiative known as the Emergency Capital Investment Program. In the aftermath of the murder of George Floyd, many corporations pledged to fight systemic racism. That hasn’t really happened, says Mark Warner, D-Virginia, discussing his plan to help corporate America do the right thing. (EMS video by Nina Mohan) “Access to capital is a hugely important issue,” said Warner, noting that many minority entrepreneurs do not have relationships with banks to allow them to successfully apply for loans. Gelat’OH! Entrepreneur Sierra Georgia encountered this very issue as she tried to expand her small business, Gelat’OH, based in Washington DC. “Like a lot of small business owners like myself, this started with just a team of one and it’s still not that much bigger than that,” she said. Sierra Georgia, founder of Gelat’OH! (Linkedin photo) Like a lot of women of color who want to start a business, Georgia did not own a house she could mortgage to raise capital. She got funding through a CDFI, but only received half of what she needed to expand her business. So she raised money through SMBX, a small business bonds marketplace connecting small businesses to local investors. “It’s a real bond offering. If you donate to somebody’s GoFundMe you’ll never see that money again, but if you buy a Gelat’OH bond, you get 11% back on your money in 2 years. It’s a way to bring wealth back to the community and empower small business owners,” said Georgia, who raised $25K in four days via SMBX. Empowering Black America “As President Calvin Coolidge said, ‘the business of America is business,’” said Charles Phillips, co-founder of the Black Economic Alliance, who served on President Barack Obama’s Economic Recovery Board. “This is what generates a lot of wealth in our country and makes us different from other countries.” “We have a lot of entrepreneurs who build businesses and build wealth and support their families. And they support their families that way and pass that down to their families. And so we laud entrepreneurs in this country as we should because it’s one of our big differentiators.” Charles Phillips, founder of the Black Economic Alliance. 23 Acce ss to F unding
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