U.S. Department of Commerce: FY2022 Broad Agency Announcement – Access to Capital: Innovative Finance
The Minority Business Development Agency (MBDA) seeks applications from qualified organizations for projects addressing historical barriers to capital minority business enterprises (MBEs) face by leveraging non-traditional financial resources. The projects can utilize technical assistance models, pilot innovative solutions, leverage technology, advance research and data, or provide education to non-traditional lenders. MBDA seeks market solutions to the barriers of access to capital that acknowledge lack of traditional collateral/assets as an impediment for MBEs.
This funding seeks to address, mitigate, and remove systemic barriers of traditional financing by leveraging alternative funding methods and non-traditional sources of lending. Funding will be prioritized to projects that show the potential for systematic or broad impact for MBEs nationally. Examples of non-traditional lenders include:
- Non-Bank Lenders
- Minority Depository Institutions
- Community Development Financial Institutions
- FinTech Lenders
- Accelerated/Advance payment providers
- Mobilization funding providers
- Local, State lending programs
- Non-Profit Lenders
A non-exhaustive list of solutions that could be considered for funding includes:
- Research, development, or pilot of innovative financing products that address the unique needs of minority owned businesses – such as a product that provides financing using nontraditional or alternative methods of funding (non-asset-based);
- Development of a new navigation program to improve the matchmaking between nontraditional lenders and minority borrowers;
- Craft the business case for lending to MBEs including researching accurate methods of risk assessment, merit and returns;
- Provide technical assistance targeted at non-traditional lenders servicing (or aspiring to serve) minority-owned businesses;
- Test, modify or launch an innovative new credit methodology aspiring to predict the credit risk of minority-owned businesses more accurately;
- The launch of clinics, training, or webinar programs to enhance business lending practices of providers targeting minority-owned businesses, including origination, underwriting, and services of loans;
- Solutions to address the lack of economies of scale, funding, data sharing, or business capabilities among non-traditional lenders supporting the credit needs of minority owned businesses.
Amount: A total of $884,559 is available to make one (1) financial assistance award to cover the first budget period of the selected project. The award will be for a two-year term but funded one year at a time. MBDA anticipates that up to $884,559 will be available in FY 2023 to support continuation funding for the second year of the selected project.
A non-federal cost share of 33% of the Federal funding is required for each budget period. See solicitation for details.
Eligibility: Eligible applicants include for-profit entities (including but not limited to partnerships, limited liability companies, and corporations), non-profit organizations, institutions of higher education, or commercial organizations. Project must be located in the U.S. or any U.S. territory, including Guam, Puerto Rico, and the Virgin Islands.
This post was filed under: