Private commitments to make deposits at community lenders on pace to reach $3 billion by 2025, and Treasury Department announced that more than 40% of loans and investments supported by the American Rescue Plan’s State Small Business Credit Initiative (SSBCI) in 2022 and 2023 supported minority owned businesses.
Following Vice President Kamala Harris’s call to action in 2023, the Biden-Harris Administration announced progress on expanding access to capital to underserved communities during the 2024 Freedman’s Bank Summer Symposium. These accomplishments include the commitment by private companies and philanthropy to make $3 billion in deposits with Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) by 2025 through the Economic Opportunity Coalition, up from the $1 billion committed in 2023. Today’s announcement is another sign that the Biden-Harris Administration is driving a great American comeback in communities across the country.
Under the Biden-Harris Administration, the U.S. Small Business Administration (SBA) has backed $35 billion in loans to over 68,000 minority-owned small businesses, an increase of more than 13% compared to the entirety of the prior Administration. Additionally, the Treasury Department released new data showing that at least 43% of the small businesses receiving loans or investments supported by SSBCI in 2022 and 2023 were minority-owned businesses, with one out of every seven transactions supporting a Black-owned small business. By the end of 2023, SSBCI had already helped to catalyze and inject over $3.2 billion in new financing for more than 3,600 small businesses. SSBCI funding included in the American Rescue Plan is expected to catalyze roughly $100 billion in capital support for 100,000 small businesses over the course of the decade.
This year’s symposium took place at Shaw University, the oldest Historically Black College and University (HBCU) in the South, and spotlighted local impacts of Biden-Harris Administration investments in and around Raleigh, NC. The city is the historic home to a branch of the original Freedman’s Bank – a Reconstruction era savings and trust company whose charter was signed in 1865 by President Abraham Lincoln to support the financial independence of the Nation’s over four million newly emancipated African Americans. Today’s event, modeled after the Vice President’s nationwide Economic Opportunity Tour, highlighted the significant progress made to support underserved businesses and aspiring entrepreneurs following the Vice President’s 2023 call to action.
Following efforts by the Biden-Harris Administration, Black business ownership and Latino business ownership are growing at their fastest pace in 30 years. In addition, median net worth is up 60% for Black families and 47% for Latino families from 2019 to 2022, after falling in the prior decade. President Biden and Vice President Harris are committed to building on this progress and ensuring that this equitable growth continues.
“President Biden and Vice President Harris understand that while genius lives in every corner of this nation, opportunity does not. This is why the Biden-Harris administration is committed to building an economy that provides an opportunity for all Americans to live up to their full potential. With record-breaking Black and Latino net worth and business ownership rates, the data continues to show that President Biden’s economic plan is delivering for working families,” said Mayor Stephen Benjamin, Senior Advisor and Director of the Office of Public Engagement.
During the 2023 Freedman’s Bank Forum, Vice-President Harris set an ambitious agenda, calling for private sector and philanthropic leaders to take action to increase capital to underserved businesses. Since this call to action, significant progress has been made to:
- Increase access for small and underserved businesses into domestic supply chains. Vice President Harris called on companies in Investing in America sectors—semiconductor manufacturing, clean energy manufacturing, transportation, heavy industry, and biomanufacturing—to strengthen and diversify domestic supply chains by committing at least 15% of their U.S.-based contract spending for small and underserved businesses by 2025. This ambitious goal matches the federal government’s commitment to spending at least 15% of eligible federal contracting dollars on small disadvantaged businesses.
- Commit $3 billion in corporate deposits to community finance institutions. Following $1 billion in deposit commitments to CDFIs and MDIs by June 2023, the Economic Opportunity Coalition (EOC) – a public-private partnership to advance opportunity in underserved communities across the country made up of more than 30 of America’s leading companies – announced an ambitious goal of growing this total to $3 billion in committed deposits by 2025. Since setting this goal, the EOC has deployed an additional $850 million to CDFIs and MDIs, including $65 million deposited in North Carolina. Deposits have gone to M&F Bank, Self Help, and the Latino Community Credit Union, made by Bank of America, TIAA-CREF, Citi, and other EOC members, putting the EOC on pace to reach $3 billion in CDFI and MDI deposit commitments by the end of the year.
- Catalyze over $3 billion in capital support for small and underserved business through the State Small Business Credit Initiative, including in North Carolina. In 2022 and 2023, states, tribal governments, and territories delivered over $750 million of SSBCI funding through SSBCI-supported loans and investments that catalyzed a total of $3.2 billion in overall new financing for more than 3,600 small businesses. Newly released program data shows that at least 43% percent of transactions supported minority-owned businesses. Roughly a third of businesses supported by SSBCI funds through the end of 2023 were women-owned and at least 4% were veteran-owned. Black and Asian-owned businesses accounted for at least 14% and 13% of SSBCI-supported loans and investments, respectively, and Hispanic or Latino-owned businesses accounted for at least 12%. Thanks to the American Rescue Plan, North Carolina is expected to receive more than $200 million from SSBCI to support small businesses in the state. By the end of 2023, the SSBCI-supported NC Loan Participation Program had already helped to leverage over $370 million in capital support for North Carolina small businesses, leading to the creation or retention of over 3,500 jobs. Other highlights from the 2023 Annual Report include: SSBCI funds have helped create 46,000 jobs, 80% of SSBCI transactions supported business with fewer than 10 employees, 90% of businesses receiving SSBCI venture capital investments were early stage, seed, or pre-seed stage, supporting the small business boom.
- Deploy over $1 billion for making equity investments in small businesses directly or through existing venture firms. SSBCI is the most widespread federal investment in small businesses through equity capital ever and the largest direct infusion of federal funds for equity participation in early-stage small businesses in history. Nationwide, over $1 billion in SSBCI funding has already been deployed to support equity investments in small businesses or obligated to venture capital funds that will invest in small companies. In the coming years, SSBCI is expected to deliver an additional roughly $2 billion and ultimately support equity investments in 47 states and territories, reaching far beyond the traditional communities served by these investments. Announced by Vice President Harris in March 2024, North Carolina has also committed nearly $32 million of SSBCI funding to a venture capital program – run through the North Carolina Rural Center (NC Rural Center) in partnership with the North Carolina Department of Commerce – that will focus on supporting venture capital funds led by emerging fund managers or fund managers representing historically underserved communities, providing much need capital to businesses who are otherwise unable to access venture capital funds.
- Help Small Businesses secure over $177 million in loan matches, grants, and private capital through the Initiative for Inclusive Entrepreneurship national pilot. At the 2022 Freedman’s Bank Forum, the Initiative for Inclusive Entrepreneurship (IIE) announced a pilot to help small underserved businesses better access available SSBCI resources through capacity building, training, and the deployment of philanthropic and private capital. The IIE doubled its initial goal by helping small businesses secure over $177 million in loan matches, grants, and private capital and aiding over 3,100 small businesses through training, technical assistance, and outreach during the 18-month pilot.
Building on these commitments, the federal government is engaged in a whole-of-government effort to support underserved businesses. The 2024 Freedman’s Bank Symposium highlighted the on-the-ground effects these efforts have already had in states and communities across the country, including in North Carolina. These efforts include:
- Awarding $850 million in federal procurement dollars going to small disadvantaged businesses (SDBs) in North Carolina. In FY23, the federal government exceeded its goal by allocating 12.1% or $76.2 billion in eligible federal contracting dollars to small disadvantaged businesses, marking the third straight year of record-breaking contract awards to SDBs. This includes over $850 million to SDBs in North Carolina.
- Expanding traditional SBA lending and Community Advantage lending to support underserved businesses. In FY 23, Community Advantage lenders grew their SBA lending by 10.8% compared to FY22 for a total of $141.3 million across 800 loans to small businesses — demonstrating the impact of expanding capital access in underserved communities. In FY24 to date, $142M in Community Advantage dollars have gone out across 791 loans to small businesses – representing 101% of total FY23 dollars with three months remaining in the fiscal year. These increases follow the transition of 142 Community Advantage lenders to the SBA’s Community Advantage Pilot Program, enabling lenders to become Community Advantage Small Business Lending Companies (CA SBLCs) and helping small business borrowers in underserved markets gain access to capital. Further, the SBA has funded over 14,000 Black-owned small businesses, backing $4 billion in loans so far during the Biden-Harris Administration, up over 53% compared to the entirely of the prior Administration.
- Providing $2.5 million in loans to National Church Residences of Clinton, North Carolina through the Department of Housing and Urban Development’s (HUD) Comprehensive cohort of the Green and Resilient Retrofit Program (GRRP). GRRP provides grants and loans to support energy efficiency and climate resiliency in affordable housing for the people most impacted by climate change. Clinton Crossing plans to undertake a deep retrofits, reducing greenhouse gas emissions and operating costs through energy efficiency measures and renewable energy generation, and making properties more resilient to climate hazards. These awards represent not just our ongoing commitment to improving the health and safety of homes for low-income families, but also the power of partnerships that use federal funding made available through President Biden’s Inflation Reduction Act combined with private resources to combat climate change and promote energy efficiency.
- Supporting CDFIs and MDIs in North Carolina by providing over $734 million in Emergency Capital Investment Program (ECIP) investments. Nationwide,ECIP – a program the Vice President pushed for and passed into law when she was a U.S. Senator – has invested $8.57 billion into community financial institutions to support small businesses and consumers affected by COVID-19. From May 2022 to December 2023, ECIP institutions in North Carolina have achieved $3 billion in total lending, 41% of which was “deep impact lending” to the hardest to serve borrowers – including those who are low-income, minorities and residents of Native American lands. This included over 2,000 mortgages to minorities and other populations totaling $440 million and 127 loans totaling $33 million to small businesses, more than 60 of which went to very small firms with revenues of less than $100,00 a year.
- Investing in housing and community development to support strong local communities. Under the Biden-Harris Administration, the Office of Community Planning and Development at HUD made over $1 billion available to communities across the State of North Carolina for housing and community development, including new funding opportunities made possible by the American Rescue Plan. Over $137 million under the HOME Investment Partnerships American Rescue Plan Program (HOME-ARP) – a $4.35 billion program to build and preserve affordable rental homes – was allocated to communities across the State of North Carolina to provide new housing, non-congregate shelter, rental assistance, and supportive services to people experiencing homelessness or housing insecurity. This funding will build nearly 700 new homes and support nearly 250 families with lifesaving services.
