Aug 19, 2019,
In a city where over half of all businesses are minority-owned, minority and women business owners still face a lack of access to capital, according to a city task force.
The city of Houston’s Women- and Minority-Owned Business Task Force, led by city council member Amanda Edwards, presented findings Aug. 16 on how to better increase access to capital and other business resources for women and minority business owners in the Houston area. Among the recommendations was increasing funding to local business service organizations, or BSOs, like SCORE. The task force also recommended funding and “implementation alliance,” which would be responsible for overseeing a network of BSOs and capital providers, developing partnerships, tracking impact and more.
Edwards, who kicked off her election campaign for the U.S. Senate in July, said that there’s a role for everyone to play in overcoming the challenges facing Houston’s diverse community. But the task force acknowledged that many women and minority business owners face difficulty in access to capital from traditional lenders — especially when pursuing loans of less than $100,000. Edwards said that large banks, community banks and community development financial institution (CDFI) lenders alike need to increase loans to women- and minority-owned businesses.
“When everybody is committed to making sure that they’re going to do what they can and what can be possible in order to facilitate increases in lending to women- and minority-owned businesses, then you will see progress made,” Edwards said.
Houston’s opportunity zones were also a topic of discussion in the presentation. The provision of the GOP-backed tax bill that went into effect last year promised to drive trillions of dollars of investment into struggling communities across the country. Edwards said that she welcomes new investments coming into local opportunity zones — of which there are 105 in Harris County alone. But she also wants to see investments being made in existing businesses operating in those areas. The task force has recommended establishing a portal by which investors could fund small businesses already operating within an opportunity zone.
“Opportunity zones are an interesting situation because nothing in the statute requires you to be investing in these zones that benefits the existing residents or existing businesses,” Edwards said.
Houston Mayor Sylvester Turner, who attended the Aug. 16 presentation, lauded the task force for its efforts and agreed that Houston needs to set a comprehensive plan to level the playing field for women and minority business owners.
“I do think it would be very, very beneficial for the city of Houston — and now we get to the implementation phase,” Turner said.
Long-term recommendations include developing small business grants and forgivable loan programs, building out the existing capacity of CDFI lenders and launching a linked deposit program to encourage lending to underserved businesses.