Access to Capital - Access to Money
What is Access to Capital
Access to capital is how hard or easy it is for someone to get money or resources for their business. Most people need to access capital when starting or growing a business.
Why Access to Capital Matters
The United States has a wide range of funding sources available to businesses. However, getting money for business can be a challenge for any person, let alone a member of a community that has faced discrimination and bias over generations.
For example, many business owners use their homes, other real estate, or personal wealth to start up or grow their business. Communities of color have less wealth built up over generations due to systemic discrimination such as redlining (refusing to loan money to people living in certain areas). In addition, the evidence of bias and discrimination in the loan process still exist.
To build strong businesses and strong communities, diverse small business owners need equitable access to capital.
One solution to help small business owners is the Washington State Linked Deposit Loan Program. Started in 1983, it encourages banks and credit unions to offer better interest rates to owners of OWMBE certified businesses.
Research on Access to Capital
To learn more about the statements above and other issues related to access to capital, check out these studies and issue briefs.