Investing in various companies is good for the economy

Because many entrepreneurs who are people of color and women may not have the capital to start their dream businesses, American investors who see opportunities in these companies are turning to social impact mutual funds to invest in their future growth.

This means providing various entrepreneurs with capital, grants and loans, or buying their debt.

The funds are consistent with the Biden administration’s goals of closing the gap between racial wealth and home ownership.

“Too many small businesses owned by people of color are struggling to access credit and federal programs that can help them grow and thrive,” the White House statement said June 1, 2021, in announced a $30 billion investment in new Small Business Administration initiatives. “President Biden has proposed a historic effort to address these ongoing challenges and encourage small business creation and expansion in communities of color.”

Supporting local small businesses

Leah Fremouw founded Bridging Virginia, a non-profit investment firm, with precisely these goals.

“Organizations like mine provide credit and other capital resources to people in communities who have been systemically excluded and historically marginalized,” she says. “We have a human approach that puts people first with the capital coming in as part of the solution.”

Woman standing in front of building (© Deaudrea 'Sha' Aguado/Bridging Virginia)
Charlene Reynolds is the Founder and President of Creative NxGen Petroleum, a 100% women-owned company based in Richmond, Virginia. (© Deaudrea ‘Sha’ Aguado/Bridging Virginia)

Founded in 2020, Bridging Virginia, according to its website, makes loans of up to $50,000 to people of color and women entrepreneurs or nonprofit organizations who need “flexible and affordable capital to support their growth and development.”

One of their partners, Creative NxGen Petroleum, is the only 100% women-owned fuel supplier in Virginia. In 2020, during a volatile market made worse by the pandemic, its founder, Charlene Reynolds, needed capital to expand.

Bridging Virginia stepped in to provide $30,000 in working capital to keep the business afloat.

unleash potential

Betty Francisco, chief executive officer of the Boston Impact Initiative, says funding entrepreneurs who are women and people of color is essential to building the national and international economy.

“As a Latina and Asian background, I’ve often seen the barriers that our minority-owned small businesses face in terms of raising capital, accessing resources, or the networks needed to grow your business,” she says. “I had built my own network and wanted to use it for good.”

Smiling woman in a building lobby (© Lane Turner/The Boston Globe/Getty Images)
Betty Francisco in Boston, January 23, 2020. (© Lane Turner/The Boston Globe/Getty Images)

Last year, the Boston Impact Initiative fund created 1,415 jobs — 80% of which went to people of color, according to its annual report. Of the 50 companies supported by the fund, 67% of entrepreneurs identify as black and 38% are women.

The fund supports small businesses, which can mean sole proprietors or businesses with up to 300 employees, says Francisco.

One company, ChopValue Boston, is a slightly larger small company — a national chain with an office in Massachusetts. Founded by Elaine Chow in Boston State, the company takes used chopsticks and turns them into furniture and decorations.

Another smaller company, Synergy Contracting, was founded and is managed by Jeysi Zuniga. It’s an LGBTQI+-owned company working to retrofit homes — particularly those owned by Black and Hispanic homeowners — to be greener.

With help from Boston Impact, Synergy has grown from one truck to three trucks and four employees to 12.

“We’re looking for companies that are addressing big social issues and maybe want to increase diversity or run their business more impactfully,” says Francisco. “For that reason, the focus is on building ownership in communities of color by providing this early capital.”


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