Friday, 30 June 2023, Bengaluru, India
A $70 million Equitable Access Fund was established by Hello Alice, a fintech firm that aids small firms in obtaining money, and the entrepreneurship ecosystem Global Entrepreneurship Network (GEN) to close the funding gap faced by female and BIPOC-owned founders.
Co-founder of Hello Alice, Elizabeth Gore told TechCrunch that there is a shortfall of almost $40 billion only inside the BIPOC group. In addition, a lack of credit history was the main barrier we observed to established firms.
Additionally, she pointed out that many small business owners need more inherited wealth or collateral to secure loans. Some people seek financing; nevertheless, just 25% of small business owners have applied for a business credit card, and 85% of those applications have been rejected because of bad credit or no credit.
These credit improvements will be available to funding partners via the Equitable Access Fund, including guarantees, loan loss reserves, and cash collateral deposits. It will be implemented over the following five years to enhance fair access to credit and open up to $1 billion in loans for small company owners who belong to what Gore dubbed the “new majority,” which includes women, veterans, BIPOC, Latinx, people with disabilities, LGBTQIA+, and other groups.
Wells Fargo took the lead in the initial capital commitments. First National Bank of Omaha, Mastercard, and the Kauffman Foundation are additional program partners.
The fund is a component of the Hello Alice and GEN-run Equitable Access Program, which offers improved credit access via a Mastercard-secured card and financial education. As part of the program, Hello Alice also debuted a business health score tool in April that offers a summary of a company’s financial health and suggestions on how owners might perform better.
According to Gore, Hello Alice has 92 lenders and serves 1.3 million small business owners. Its loan centre has given out slightly over $30 million in awards.
Gore said, especially during the first 24 months of a business, “We’ll see that it’s even harder for people to get loans.” “The fear that things are tightening and interest rates are changing, the financial turmoil, and the uncertain economic climate.” One CEO stated, “All business owners must currently be properly managing their cash flow.” We hurried to release the business health score, which was scheduled for release later.
[Source of Information : Techcrunch.com]
