Alexandria, Va.— Today, the Society for Human Resource Management (SHRM) announced its capital commitment to a new fund in support of minority-owned business enterprises (MBEs).
The fund, led in partnership between Advantage Capital and the NMSDC Business Consortium Fund (BCF), brings together BCF's 30-year history of providing access to capital to entrepreneurs of colors with Advantage Capital's 30 years of investment expertise in highly distressed urban core and rural communities.
The mission of the fund is to close the racial wealth gap by investing in entrepreneurs of color who are building the products and services of the future. The fund will provide flexible risk capital to support minority businesses and help them grow.
The typical white household has eight times the wealth of the typical black household (Source: The Federal Reserve, September 28, 2020). This wealth gap results in a start-up capital gap. As a result, Black entrepreneurs start out with one-third of the capital of the typical white startup. This lack of capital and collateral makes it harder for entrepreneurs of color to attract outside funding. A fund that focuses on growth-ready MBEs seeks to mitigate these realities, and in doing so, makes a critical first step in eradicating wealth disparities in minority communities.
"HR professionals know equal access to jobs is a critical component of the fight to eliminate racial disparities in America. But we must also ensure Black entrepreneurs have access to critical capital so they, themselves, can become job creators," said Johnny C. Taylor, Jr., SHRM-SCP, SHRM president and chief executive officer. "SHRM's support of minority-owned business enterprises (MBEs) demonstrates our commitment to address barriers and to help close the racial wealth gap so everyone has the opportunity to thrive equally. The push for inclusion and business equity is ongoing and must include everyone."
"We believe the best way to close the racial wealth gap and scale minority businesses is to invest in entrepreneurs of color," said Henry Childs, Chief Fund Manager, NMSDC Business Consortium Fund. "This fund will fill the void in access to capital for minority-owned businesses and revitalize our communities."
Because the workplace is the place SHRM knows best, we've always felt obligated and uniquely qualified to address racial inequities and push for significant change in the world of work and society. That's the reason this newest investment to support minority-owned businesses exemplifies the mission of SHRM's Together Forward @Work Initiative, which is a call to action for the business community and HR professionals to drive racial inequity out of workplaces.
SHRM joins other organizations including U.S. Bank, Truist Bank, Busey Bank, Midwest Bank, Midland Bank, Southern Bancorp and Altria in its support of the fund. The fund anticipates it will start distributing capital to support minority-owned businesses in the next few months.
SHRM, the Society for Human Resource Management, creates better workplaces where employers and employees thrive together. As the voice of all things work, workers and the workplace, SHRM is the foremost expert, convener and thought leader on issues impacting today's evolving workplaces. With 300,000+ HR and business executive members in 165 countries, SHRM impacts the lives of more than 115 million workers and families globally. Learn more at SHRM.org and on Twitter @SHRM.
About Advantage Capital
Advantage Capital provides financing to established and emerging companies located in communities underserved by conventional sources of capital. Since 1992, the firm has invested more than $3 billion in companies from a diverse array of industry sectors and has helped support more than 50,000 jobs. Learn more at www.advantagecap.com, or via Twitter or LinkedIn.
About the Business Consortium Fund
The National Minority Supplier Development Council Business Consortium Fund, Inc. is a certified United States Department of the Treasury Community Development Financial Institution. BCF is America's most comprehensive financing and consulting support organization exclusively serving NMSDC certified minority-owned businesses.