hello alicea fintech that helps small businesses access capital and an entrepreneurial ecosystem Global Entrepreneurship Network (GEN) created a $70 million Equitable Access Fund aimed at bridging the funding gap faced by women and founders under BIPOC.
“There’s an estimated $40 billion gap between the BIPOC community alone,” Hello Alice co-founder Elizabeth Gore told TechCrunch. “Additionally, the biggest gap we see among growing businesses is lack of credit history.”
She also noted that many small business owners do not have generational wealth or collateral to obtain loans. Some turn to credit; some turn to credit. However, only 25% of small business owners apply for a business credit card, and 85% of those applications are declined due to bad or lack of credit.
The FAF will provide financing partners with these credit enhancements, including guarantees, loan loss provisions and cash collateral deposits. The program, to be deployed over the next five years, aims to improve equitable access to credit and extend up to $1 billion in credit to small business owners in what Gore called the “new majority,” including women, veterans, BIPOC, Latinos, etc. Disabled, LGBTQIA+ and other groups.
The initial capital commitment was led by Wells Fargo. Other partners in the program include First National Bank of Omaha, MasterCard and the Kauffman Foundation.
The fund is part of the Fair Access Program run by Hello Alice and GEN, which provides greater access to credit through MasterCard secured cards and financial education.As part of this initiative, Hello Alice also launched Enterprise Health Score Tool The April report provides an overview of the financial position of the business and makes recommendations on how owners can improve performance.
Meanwhile, Hello Alice serves 1.3 million small business owners, and its lending center has disbursed more than $30 million in grants and continues to grow, with 92 lenders, Gore said.
“Because of economic uncertainty, turmoil in the banking sector and concerns about tightening conditions and changes in interest rates, we will see it become more difficult for people to get loans, especially in the first 24 months of their business,” Gogh said. Er added. “We’re really rushing to publish the business health score, which should have been released later, because it’s absolutely critical that all business owners manage their cash flow right now.”