Small minority-owned businesses have often struggled to gain access to capital and other tools to grow, a challenge made more daunting by the economic upheaval of the coronavirus pandemic. But a new effort announced Tuesday aims to address those disparities in pockets of the nation long gripped by poverty.

Hope Enterprise Corporation, which runs a Jackson, Mississippi-based credit union that specializes in lending and other financial services to underserved communities, is partnering with seven cities and nine historically Black colleges and universities to launch the “Deep South Economic Mobility Collaborative.” Goldman Sachs 10,000 Small Businesses initiative is providing up to $130 million to the endeavor, which will be available to clients in Louisiana, Mississippi, Alabama, Arkansas and Tennessee.

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“We’ve seen businesses close in record numbers, particularly small businesses, mom and pop businesses, those owned by people of color,” said Bill Bynum, CEO of Hope Enterprise Corporation, speaking exclusively to The Associated Press ahead of the launch. {snip}

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Participating small business owners can access capital provided by Goldman and take online classes offered through Goldman’s 10,000 Small Businesses Initiative. Other resources include small business development centers offered by some HBCUs, and procurement and contracting programs in certain cities, Bynum said.

Any business owner in the five states can apply, but the program aims especially to help minority-owned businesses in a region that has struggled to address deep poverty and racial economic disparities.

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A June study by University of California, Santa Cruz economist Robert Fairlie showed that while 22% of businesses nationwide closed in the immediate onslaught of the pandemic, the situation was far worse for minority-owned businesses: 41% of Black-owned businesses and 32% of Latino-owned businesses closed. When later data showed a business rebound, minority-owned businesses were slower to reopen.

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Margaret Anadu, Goldman Sachs Managing Director and Head of the Urban Investment Group, said the collaborative aims to tap Hope’s expertise and experience in a region that has suffered economically. Anadu said the goal is very focused: “Let’s get capital to Black-owned businesses in the Deep South where there is some significant distress and do it with our public sector leaders and the best mission driven lender in that region.”

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