San Antonio Business Journal | By Janie Barrera
OPINION: Predatory lenders offer seemingly attractive loan terms, only to charge exorbitant interest rates that can trap borrowers in a cycle of debt. There is a better way for small businesses to overcome barriers to accessing capital.
As LiftFund’s founder, I have dedicated my life to supporting small businesses and entrepreneurs who often face significant barriers to accessing capital. Small businesses and entrepreneurs are the lifeblood of our economy. They create jobs, drive innovation, and spur economic growth. However, accessing capital remains a significant obstacle for many, particularly those operating in underserved communities or serving underrepresented populations.
The Covid-19 pandemic exacerbated these challenges, and still, over three years after the start of the pandemic, small businesses continue to struggle to stay afloat, lacking access to capital when they need it most. In 2022, over half of all small business owners said inflation was a top challenge, with roughly four in five saying rising prices had a significant impact on their business.
There has been much discussion around economic recovery, yet traditional lenders have tightened their lending standards, making it more difficult for small businesses to qualify for loans. Meanwhile, costs continue to rise along with labor shortages and supply chain disruptions.
Economic recovery will depend on our ability to support these entrepreneurs, particularly those who have been hit hardest like minority-owned and women-owned small businesses who face additional challenges in accessing capital due to systemic inequalities and discrimination in the lending industry.
This is where nonprofit lenders like LiftFund come in. We provide access to capital and technical assistance to small businesses and entrepreneurs who might not qualify for traditional bank loans. Our interest rates are reasonable, and our mission is to create more equitable access to capital for all.
However, our work is not without challenges. We often lack the funding necessary to advertise our services and reach the small businesses and entrepreneurs who need us most. We must compete with predatory lenders who offer seemingly attractive loan terms, only to charge exorbitant interest rates that can trap borrowers in a cycle of debt.
To truly support small businesses and entrepreneurs, we need a concerted effort. This means investing in technical assistance to help them better navigate the lending process. It means advocating for policies that support small businesses and entrepreneurs, such as tax incentives and streamlined regulatory processes. And it means promoting the work of nonprofit lenders like LiftFund, who are working to create more equitable access to capital for all.
Now, as I retire from my position, I hope to inspire others to lead the next chapter of LiftFund’s journey. I urge small business champions across the country to join us in this mission.
LiftFund is searching for a CEO who shares our passion for economic justice and our commitment to supporting small businesses and entrepreneurs. Together, we can create a stronger, more resilient economy that benefits everyone.
Small businesses and entrepreneurs deserve our support, and they are counting on us to provide it. Let’s rise to the challenge and work together to create a brighter future for all.