DC-backed capital funding program mystifies black business leaders

The District Insurance, Securities and Banking Department’s program to bring more capital to black businesses is strong, but black business leaders say they know little about it.

DISB Commissioner Karima M. Woods recently told the informant about the DC BizCAP program.

While many entrepreneurs look to DC’s Department of Small Business and Local Business Development (DSLBD) for capital issues, Woods wants them to know that the DISB can help them too.

Woods explains DC BizCAP

Woods said DC BizCAP received its funding through the US Department of the Treasury as part of the state’s Small Business Credit Initiative, founded under the Small Business Employment Laws of 2010. .

“Through this law, the DISB received $ 13 million in funding to create this program,” said Woods. “To administer the funds, the DISB partners with private lenders to provide loan enhancements to small businesses that need additional support in obtaining loans from private lending institutions.”

Woods said that in fiscal 2021, DC BizCAP provided $ 1,355,000 to support five small businesses.

Woods knows that minority companies have problems accessing capital from traditional lenders such as banks. She said the Loan Participation Program (LPP) “is fully inclusive and offers subsidized interest rates to minority-owned businesses, certified businesses and women.”

“With this grant, the DISB is able to halve the interest rate charged by the lender,” she said.

A Jan. 22, 2018 article posted on the Forbes magazine website, “Why Minorities Have Such Difficulty Accessing Small Business Loans,” stated that minorities generally have lower equity and / or lack of equity. ‘access. The article indicates that banks have traditionally been against applicants with less money to spend, in part because applicants are unlikely to be able to offer collateral.

Woods stated that DC BizCAP does not have a warranty requirement.

“Keep in mind, however, that the support offered through DC BizCAP is not a direct loan,” she said. “DISB is partnering with local lenders to improve lending. Therefore, although the ministry does not require collateral, in many cases the lender can.

Woods said a business does not need to be in business for a certain number of years to be eligible for the program.

Essentially, said Woods, DC BizCAP was designed to help entrepreneurs secure new sources of capital in conjunction with traditional lenders such as banks.

“Under the rules and regulations of the program, small business borrowers can use funding from DC BizCAP to provide the additional support needed to obtain approvals from commercial lenders,” she said. “We offer guarantees, participate in loan applications and in some cases can co-invest to provide access to capital to small businesses in need of financial support. “

Puzzled black business leaders

While Woods praises his agenda, the details of DC BizCAP remain obscure to many blacks who are in business.

The informant contacted Kimberly Corbin, administrative and financial director of the Greater Washington Urban League. Corbin said she did not have enough knowledge of the program to comment. Amanda Stephenson, who owns The Fresh Food Factory in Ward 8 and has a reputation as a pro-black small business activist, said she hadn’t heard of DC BizCAP either.

However, Alfred Swailes, owner of A&A Premium Paint Distributor, LLC in northeast Washington and head of the DC Black Business Task Force, said he was familiar with the program.

“I tried to get funding through DC BizCAP by working through the Latino Economic Development Center,” Swailes said. “I found the process to be cumbersome and that it involved a lot of work and time. My request was not fully processed.

Swaies said it comes as no surprise to him that few people know about the program.

“It was not well publicized,” he said. “When black businessmen want information about sources of capital they can get with the help of the DC government, they look to DSLBD, not DISB.”