For small businesses that want to grow and acquire bigger customers and contracts, making money often costs money. This is especially noticeable for entrepreneurs in underserved communities.
That’s why Mission Driven Finance, a San Diego-based impact investment firm, has partnered with the Council for Supplier Diversity to distribute up to $10 million to minority-owned and other diversely-owned small businesses in San Diego and Imperial counties. Did. Founded in his 2016, the company is an influential investor seeking to create positive social change by funding local businesses that benefit their communities.
This dedicated fund, called the Subcontractor Financing Program, aims to help small businesses obtain financing to fulfill their contracts with corporate and government clients. This is intended for “Diverse Suppliers”. That means the company is SBA certified as a Minority-Owned, Women-Owned, or Veteran-Owned Business.
Lauren Grattan, co-founder and chief community officer of Mission Driven Finance, says access to capital remains a challenge despite efforts to foster inclusive economic growth among local businesses.
“Even with that move, we want small business owners, especially entrepreneurs of color and women, and service-disabled veterans, to grow from business ideas that can deliver on contracts with Kaiser Permanente and Sempra. It’s not easy to do, or the Navy — these are the three big anchor agencies here — so we’re trying to smooth it out,” she said.
For example, a local business may sign a contract to provide services to the city, but it requires new equipment to be successful. Small business owners may not have the facilities or extra cash for collateral to qualify for a traditional loan.
To fill the funding gap, impact investment firms such as Mission Driven Finance use other criteria to determine how to invest in small businesses. For example, the firm may not require credit scores or personal guarantees as part of the process and instead consider the value of the contract to back the loan, he said.
These loans to small businesses and nonprofits range from $100,000 to $500,000 at a fixed interest rate of 8.5%. The new program builds on the company’s existing advance strategy. We have helped groups such as San Diego’s Somali Family Services obtain funding to provide community services to the City of San Diego.
Grattan said they suspended part of their lending portfolio during the pandemic when there were other relief programs distributing funds to help businesses survive. But at this stage of recovery from the pandemic, there is an opportunity to focus on subcontractor financing to help entrepreneurs rebuild and grow.
“We’re making sure the procurement is on track,” she said. “Supplier Her Diversity Council and partners at the San Diego Central Black Chamber of Commerce see great opportunities for small businesses to bid on things.”
The focus on helping underserved entrepreneurs grow their businesses through contracts will have a positive ripple effect on the community, Grattan said.
“People hire from their own communities… It’s not just that you supported that one business owner. You supported their employees,” she said. “And being able to level the playing field and have overall more inclusive economic opportunities is a huge multiplier effect.”
It’s not the only “impact investing” company in town. There are others, like Accessity, that try to fill the financing gap for small business owners, and his SBA-backed loan programs through local banks.
Small business owners will also have the opportunity to learn about landing bids and government contracts at Southwestern College on September 21st. The region’s Procurement Technical Assistance Center will host an in-person event called “Thriving as a Business in a Pandemic World (Panel & Resource Fair)” featuring local agencies such as Caltrans, City of San Diego, General Atomics and Ports. doing. such as San Diego.
For more information and to register for the resource fair, visit the event page.
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