Today is CAPITAL DAY here at ICIC!

A key driver of business success is access to financial capital. Businesses often have capital needs that are not met, especially businesses in inner cities.  

We’re on a mission today to change all that.

How? We’ve got two ways.

First, we’re in Washington, D.C. at the Federal Reserve. Our research team is presenting Capital Availability in Inner Cities: What Role for Federal Policy? As the title suggests, the paper looks at the role federal policy has in ensuring access to capital for inner city businesses.

To help digest the findings, the ICIC team has broken down the paper in to five Inner City Insights. The topics include: Framing Capital Policy for Inner Cities, Measuring the Capital Gap, The Impact of SBA Loan Programs in the Inner City, The Impact of New Market Tax Credits in the Inner City, and The Impact of CDFI’s in Inner Cities.

Some of the key findings include:

• Inner city businesses are dramatically split between the “haves” and “have nots”
• 71% of inner city companies are dramatically undercapitalized, operating with only one quarter of the capital compared to their industry peers
• Most NMTC money deployed in the inner city is used for real-estate transactions
• CDFI lending is highly concentrated--just 10 inner cities account for 82% of all CDFI lending to inner cities nationwide

To solve the capital gap, stakeholders must understand the depth of the problem. By disseminating these research findings, we hope there will be a renewed interest by organizations, government agencies and financial institutions that want to support urban small business growth.

Simultaneously, we’re in New York today with Bank of America for the Inner City Capital Connections (ICCC) National Match Day at Fortune Magazine’s headquarters. ICCC brings entrepreneurs and capital providers together, helping inner city companies raise money and create jobs. ICCC companies, time and again, prove that when given access to capital, inner city companies generate the jobs and wealth that are crucial to the transformation of their communities.

Some fun facts about ICCC, per the program’s new impact report:

• 275 inner city businesses have participated, representing 104 cities and 30 states;
• 150 investors have been involved in the program;
• $406 million in capital has been raised by ICCC companies--$154M in equity, $252M in debt;
• 2,790 jobs have been generated by ICCC companies;
• 38% of ICCC employees are inner city residents

We’re hoping to beef up these statistics even more after today. We’re expecting more than 125 companies and 50 investors to participate in today’s Match Day alone.

Equipped with better knowledge and the ability to foster relationships between lenders and urban businesses, we’re tackling the capital access gap—two steps at a time!

BY Amanda Maher on November 10th, 2011

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