Initiative to increase minority lending launched in Baltimore, Los Angeles
WASHINGTON, Sept. 28, 2016 /PRNewswire-USNewswire/ — The U.S. Small Business Administration (SBA) and the Milken Institute have announced the Partnership for Lending in Underserved Markets (PLUM) Initiative, a groundbreaking collaboration to develop and test initiatives designed to more effectively provide capital to minority-owned businesses throughout the United States.
Maria Contreras-Sweet, SBA Administrator and the voice of small business on the President’s Cabinet, said: “Increasing access to capital in underserved communities continues to be one of my highest priorities. Solving this longstanding and persistent challenge would open the door for new ideas, new visionary voices, and revolutionary business innovations from historically unexpected places. This new partnership with the Milken Institute brings together some of the brightest minds in this field with the local and national leaders and resources needed to create opportunity and transform the small business marketplace for the better.”
Stephanie Rawlings-Blake, Mayor of Baltimore said: “My Administration is committed to creating greater access to capital and business opportunities for Baltimore City’s small, minority, and women-owned businesses; and partnering with the Small Business Administration and Milken Institute to launch the PLUM initiative provides an opportunity to connect minority entrepreneurs and traditionally underrepresented business communities to programs that encourage their growth. We recognize that small businesses tend to hire locally and offer the greatest opportunity for inclusion. Creating resources that address capital access disparities is imperative to the growth of our local economy, which thrives when small and minority-owned businesses are successful.”
Aron Betru, managing director of the Milken Institute’s Center for Financial Markets and co-chair of the Baltimore Task Force, said: “The partnership builds on the Milken Institute’s core efforts to promote financial market understanding and expand access to capital. We are delighted to work with the SBA, small business lenders, local city government and the business community to go beyond identifying the problem and into marshaling actionable solutions.”
Kevin Klowden, executive director of the Milken Institute’s California Center and co-chair of the Los Angeles Task Force, said: “Our pilot program with the SBA is aimed at not only expanding capital access to underserved communities, but to address lending gaps for minority urban entrepreneurs that have grown over the past decade. We will work both in Baltimore and in Los Angeles with leaders in business, lending and policy who are best positioned to affect and sustain change. The potential impact on job creation and business development in these cities, in the places where they are needed most, can be truly significant.”
A Credit Gap
Following the Great Recession, small business owners, especially those setting up shop in underserved markets, have faced a recurring problem of limited access to capital. Conventional small business credit is still only at 85 percent of its pre-recession level. These gaps are especially evident in metropolitan areas with higher proportions of minority-owned businesses including Baltimore, Maryland and Los Angeles, California.
The PLUM initiative responds to this persistent challenge by bringing together leaders and policy experts from SBA and the Milken Institute to develop policies, recommendations, and concrete steps toward increasing access to lending and other sources of business capital in minority and other underserved communities.
The long term goal of the initiative is to increase the capacity of lenders to better serve historically underdeveloped sectors of the small business community. Baltimore and Los Angeles were chosen because their economies also impact surrounding communities and can help drive growth in larger regional economies.
For its part the Milken Institute will provide direction, research and engagement with stakeholders to address specific challenges faced by small business lending in underserved markets. SBA will provide expert leadership, data and information to support the initiative and will market transferrable solutions to other cities and communities beyond Los Angeles and Baltimore.
ABOUT THE U.S. SMALL BUSINESS ADMINISTRATION (SBA)
The U.S. Small Business Administration (SBA) was created in 1953 and since January 13, 2012 has served as a Cabinet-level agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation. The SBA helps Americans start, build and grow businesses. Through an extensive network of field offices and partnerships with public and private organizations, the SBA delivers its services to people throughout the United States, Puerto Rico, the U.S. Virgin Islands and Guam.
ABOUT THE MILKEN INSTITUTE The Milken Institute is a nonprofit, nonpartisan think tank determined to increase global prosperity by advancing collaborative solutions that widen access to capital, create jobs and improve health. We do this through independent, data-driven research, action-oriented meetings and meaningful policy initiatives.