(FOX 9) - The gap in financing between Black-owned businesses and white-owned businesses is stark, and experts say COVID-19 has only worsened the situation.
A financial bridge, called the Community Reinvestment Fund, provides unique help for businesses owned by minorities, women and veterans. The program is hoping to level the playing field.
The organization has been around for more than three decades, but now leaders are ready for more minority-owned small businesses to take advantage of the help.
The director of community advancement at the CRF says the goal is to dismantle the barriers communities of color deal with when trying to access capital for their small business. Anisha Murphy says one of the biggest problems is risk.
Many times, minority entrepreneurs are in the restaurant, service or construction industry. Those businesses are considered higher risk because the return is not as consistent. So, big banks tend not to give approval.
At CRF, not only do those businesses have a better opportunity to get approved for financing, but they get access to community partners that will teach them things like budgeting, give them tech assistance and provide access to lawyers.
CRF also boasts a very unique platform called Connect 2 Capital, in which entrepreneurs just go online to make quick connections.
"You just type in your need and then it just matches you - which is really cool - to a local organization that may be able to service your need for capital. So, really using technology as a way to simplify and grow and sustain their business for the long run," said Murphy.
Murphy hopes more businesses understand the importance of programs like CRF, especially after COVID-19 further revealed that Black and other minority communities are under invested-in. She says CRF will continue to work with partners on innovative programs to provide capital for business owners of color who really need it.
"Looking at the ecosystem in the Twin Cities, we all want to work together and solve the issue and dismantle institutional racism together as well as barriers that prevent entrepreneurs of color, women and veterans from advancing in our society. That’s a beautiful thing. Before, it was more competition. Now, it’s collaboration that’s driving us to create something bigger and that will sustain even after I’m out of this world," Murphy added.
She says a lot still needs to be done to dismantle barriers. It’s going to take policy change, which means we all need to work together. If you’d like to learn more about the Community Reinvestment fund, visit their website here.