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.

Link: https://www.grants.gov/web/grants/view-opportunity.html?oppId=340105

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