Q&A: Black Vision Fund’s $ 100 million reinvestment target
This week, the Expanding Black Business Credit (EBBC) announced the launch of its Black Vision Fund, with the aim of closing the country’s racial wealth gap.
The Black Vision Fund will direct long-term funds to seven Black-led community development finance institutions (CDFIs), including the Minneapolis-based Metropolitan Economic Development Association. These institutions will then provide loans to black-owned businesses, which can then invest in new jobs and income opportunities. Ultimately, it will bring more wealth to their families and communities.
Inez Long is President and CEO of the Florida-based Black Business Investment Fund, one of the fund’s CDFI partners, as well as a member of the EBBC Board of Directors. She spoke about the Black Vision Fund and its goal of raising a minimum of $ 100 million for community reinvestment.
“We believe… that if you can increase the gross national product through the work of these companies, then of course everyone will benefit in our country,” Long said.
The fund’s other CDFI partners include Community First Fund, City First Bank, Hope Credit Union, Texas Mezzanine Fund and National Community Investment Fund, according to a press release.
Long suggests that black business owners interested in raising funds contact one of the CDFIs or visit the fund’s website, ebbcfund.org/black-vision-fund.
The interview has been edited for length and clarity.
Q: First of all, I wanted to get an overview of who the EBBC and the Black Business Investment Fund are, so can you tell me about these two organizations and their purpose?
A: The Expanding Black Business Credit initiative is an initiative that was launched several years ago. And the point of that was to bring together CDFIs that were run by people of color. [and] who were doing very aggressive and unique things, to bring capital to black businesses in low income communities across the country. And so we came together as a group for the sole purpose of raising additional capital that we can leverage through our partnerships and the work we were doing to reinvest in communities. There are seven CDFIs that are members of the Expanding Black Business Credit group.
Q: Can you tell me about the recently launched new fund?
A: The Black Vision Fund is the dream of the Expanded Black Business Credit group to have a vehicle that investors, friends [and] partners can invest grant funds and capital in. And these dollars would therefore be invested in CDFIs who wish to reinvest these dollars in the black business community. It is therefore a vehicle that we use to raise capital that we reinvest in the community.
Q: What are the funding mechanisms like to obtain funds for these CDFIs? And how were they going to distribute the funds?
A: The financing mechanism is through contracts, whether it is a grant or a debt. There is a contract between CDFI and the Black Vision Fund. And there are measurable deliverables attached to this contract that the money will be used to make an impact on, [including] that number of businesses, and in many ways, new jobs will be created and that sort of thing.
Q: One of those CDFIs is based in Minneapolis, isn’t it?
A: It’s correct. … Many of our clients need longer term capital [and] more cost capital so that we can really make a big impact with those minority business owners. And so this is the kind of capital that the Black Vision Fund attracts for us, members like the one located in your state.
Q: Why do these companies need long-term capital? What kind of impact do you think this will have?
A: We all recognize that there is a fundamental racial gap in the wealth of this country that is generational and that occurred long before any of us were born. Policies have been developed to exacerbate this. As professionals working in finance, what we’re trying to do is… bring capital to these underserved communities because you don’t get equity any other way. So for people who have a more entrepreneurial mind, who want to start businesses – and these businesses are able to generate jobs, which means they employ more people. [and] create income and equity – they enrich their own families, they enrich their employees.
… Business development in America is a way to bring wealth to communities. And so that’s what we all do as professionals in the work we do. And that’s why the Black Vision Fund is so important, because it allows us to attract more capital together than we can attract individually, and we are implementing it across the country.
Q: There are a number of data points that show black-owned businesses are less likely to get bank financing and more likely to be denied a loan. How will the investment of these CDFIs reduce these disparities?
A: I’m happy to give you an example of a black women’s business we’ve helped. She was a hairdresser, so we helped her open her own store. And in her own shop, she was able to help five other salon women to have their own booth, [where] they generated income. And she did it with great success. Then she was able to get a second store, and with the second store, she was able to help more women start businesses. … And then from there, she was able to create a school. And in this school, then, she was able to help young women who wanted to get into the hairdressing business. So you can see the ripple effect of her work as an entrepreneur and the change she has made to everyone she helps.
It’s kind of a job that we do. And so the companies that we tend to lend money to tend to be black companies that banks don’t lend money to because they don’t underwrite for a bank’s wallet – but they will underwrite for our. wallet. We take an additional risk – for lack of a better word – but we also provide significant technical assistance to these business owners to help them understand how to best run their businesses and how to best grow their businesses. And that’s the economic impact we can make in communities across the country with the investments we make.
RELATED: Panelists call for focus on inclusion in US bailout
Like this article ? Access all of our great content with a monthly subscription. Start your subscription here.