Vice President Harris Announces New Initiatives to Support Minority-Owned and Underserved Businesses

In a recent update, Vice President Kamala Harris has unveiled a set of groundbreaking initiatives aimed at expanding capital access and contracting opportunities for minority-owned and underserved businesses. These measures are part of the broader "Investing in America Agenda," a key component of the Biden administration's economic strategy to uplift and strengthen the nation's small businesses and communities.

Empowering Underserved Suppliers and Small Businesses

Vice President Harris emphasized the need to address financial disparities that have historically hindered progress in underserved communities. By partnering with the private sector, the government can leverage its resources to create opportunities and prosperity for millions of Americans.

The "Investing in America Agenda" has sparked a surge in factory construction, contributing significantly to the nation's GDP. To ensure equitable participation in this economic upturn, diversifying suppliers in manufacturing, construction, and related services is vital. This diversification strengthens the country's supply chain, promotes economic resilience, and taps into the untapped potential of small- and medium-sized businesses, especially those in underserved communities.

To this end, the administration has set a new record by awarding nearly $70 billion in federal contracts to small, disadvantaged businesses in Fiscal Year 2022. Additionally, $12 billion has been invested in community lenders, including Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs), to extend access to capital and resources to underserved entrepreneurs.

The U.S. Department of Treasury estimates that these investments in community lenders will result in a $50 billion increase in lending to Latino communities and nearly $80 billion to Black communities over the next decade.

This substantial support has already led to significant increases in loans to Black-owned and Latino-owned businesses, spurring the creation of new businesses and lowering unemployment rates within these communities.

Collaboration and Commitments

These announcements coincide with the annual Freedman's Bank Forum, where private, public, and non-profit sectors make commitments to accelerate wealth-building for underserved businesses and communities. The highlights of these commitments include:

1. Strengthening Domestic Supply Chains: Companies in strategic sectors, such as semiconductor manufacturing, clean energy manufacturing, transportation, heavy industry, and biomanufacturing, are urged to allocate at least 15% of their U.S.-based contract spending to small and underserved businesses by 2025. Several major companies have already joined this initiative.
2. Expanding Deposits into Community Finance Institutions: The Economic Opportunity Coalition (EOC) has set an ambitious goal of reaching $3 billion in committed deposits to CDFIs and MDIs, with the aim of supporting community lenders.
3. Resource Rural Program: The Heartland Fund has launched Resource Rural (RR), a $75 million program to ensure rural communities benefit from federal funding for climate, energy, and infrastructure investments.
4. Investment Fund for Small Businesses: The Initiative for Inclusive Entrepreneurship (IIE) is launching an $80 million investment fund to help small businesses access capital programs, including the State Small Business Credit Initiative (SSBCI).
5. Support for Inflation Reduction Act Credit Programs: Accelerating Community Investments (ACI) is partnering with What Works Plus to support the equitable implementation of the Inflation Reduction Act, driving clean energy investments in low-income communities.

Federal Commitments to Expand Capital Access

Federal initiatives are also committed to expanding capital access and contracting opportunities for underserved businesses, with specific programs and objectives. These include:

• Investing in America Small Business Opportunity Program: A $75 million program to support technical assistance for very small and underserved businesses under the State Small Business Credit Initiative (SSBCI).
• Federal Contract Opportunities for Small Disadvantaged Businesses: The administration aims to award 13% of federal contract spending to small disadvantaged businesses for FY 2024, rising to 15% by FY 2025.

Promoting Equal Opportunity and Equitable Access

The U.S. government has initiated several programs to ensure equal opportunity and equitable access to capital, investment, and quality jobs, including:

• Thriving Communities Program: The Department of Transportation is offering up to $22 million to support communities in developing infrastructure projects.
• Greenhouse Gas Reduction Fund (GGRF): The Environmental Protection Agency (EPA) is mobilizing financing and private capital for clean energy projects and providing capacity building for community lenders.
• SBA Rule Proposal: The Small Business Administration (SBA) is proposing a rule to expand access to SBA loan programs for individuals with certain criminal history records.
• Community Advantage Program: The SBA is enabling Community Advantage Pilot Program Lenders to become Small Business Lending Companies (SBLCs) to expand capital access in underserved communities.
• Inclusive Energy Innovation Prize: The Department of Energy (DOE) has awarded $1.5 million to teams in various states to support clean energy innovation in underserved communities.
• Interagency Community Investment Committee (ICIC): EPA and DOE have joined the ICIC to enhance coordination of federal community investment programs, focusing on underserved communities.

These initiatives represent a comprehensive approach to fostering economic growth, promoting inclusivity, and expanding opportunities for businesses in underserved communities across the United States. Vice President Harris and the Biden administration are committed to realizing these goals and continue to take significant steps to empower minority-owned and underserved businesses.

Pablo Segarra, Esq., Founder of Sidehustle.law

Mission: To empower diverse tech founders through legal guidance and education.

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