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.

Linked Deposit Program

One solution to help small business owners is the Washington State Linked Deposit Program. Started in 1983, it encourages banks and credit unions to offer better interest rates to owners of OMWBE 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.

Financing Patterns and Credit Market Experiences: A Comparison by Race and Ethnicity for U.S. Employer Firms (2018)

Latino Business Ownership: Contributions and Barriers for U.S.-Born and Immigrant Latino Entrepreneurs (2018)

Best Practices for Technical Assistance Programs Serving Black and Hispanic Entrepreneurs and Small-Business Owners (2018)

Partnership for Lending in Underserved Markets (PLUM) Phase II Summary: Lessons Learned for Advancing Minority Small Business Capital Access (2018)

Partnership for Lending in Underserved Markets (PLUM) Phase I Summary: Developing Action-Oriented Solutions to the Financing Challenges Facing Minority-Owned Small Businesses (2017)

Minority-Owned Depository Institutions: A Market Overview (2018)

Debt, Equity, and Free Money: How Local and State Governments Can Promote Minority Small Business Capital Access (2018)

Women’s Business Ownership: Data from the 2012 Survey of Business Owners (2017)

Contracting Barriers and Factors Affecting Minority Business Enterprises (2016)

Minority Business Ownership: Data from the 2012 Survey of Business Owners (2016)