In Support Of A New $100M Fund, BIPOC Business Owners Are Encouraged To Apply For Funding

With $100 million in funding, Living Cities and Known are partnering to provide financial support to entrepreneurs of color who are often overlooked for much-needed help.

The two organizations will manage the Cities Catalyst Fund III, a $100 million fund to confront underinvestment in Black, Indigenous, and People of Color (BIPOC) communities.

The investment is also intended to provide new business to diverse fund managers who will help distribute the money to business owners. That is important because those fund managers, including Black-owned firms, are generally not used as a vehicle to provide capital to minority entrepreneurs.

Living Cities’ President and CEO Joe Scantlebury stated, “The funding is needed because the level of private capital and public funding available to brilliant, innovative, and hard-working entrepreneurs of color is shamefully low.” Only 60% of BIPOC business owners gained the full funding they applied for at a bank, versus 80% of their white peers, based on Federal Reserve data.

Scantlebury shared via email that the disparity is the continuation of policies and practices that enshrined white economic privilege, incented anti-Blackness, and made economic violence on and wealth extraction from people of color a standard economic practice in the U.S.

“By 2045, our nation will be a multicultural, multiracial, and multiethnic plurality, so economic practices that enable us to build a more inclusive and equitable economic order must begin now.”

Simultaneously, a Citi Global Perspectives & Solutions report estimated $16 trillion in lost GDP due to racial Inequality in the United States. The deficit reportedly contained “gaps in wages, access to housing and higher education and investment in Black-owned businesses.”

Another report showed that a hefty 56% of Black business owners encounter obstacles in obtaining credit that ultimately restricts their ability to grow. This finding is significant, as access to capital is critical for the success of any business owner. The problem is magnified for Black business owners, who typically experience more difficulty getting financing than their non-diverse peers.

Living Cities and Known are still inviting investors to join the fund, with more details forthcoming.