TMC Community Capital - Racially Just Lending

Income inequality

Expand existing project, program, or initiative (expanding and continuing ongoing, successful work)

We are seeking to address the significant financial and digital inequities faced by underserved and under-resourced small businesses in Los Angeles, particularly those owned by women, Black, Brown, and low-income entrepreneurs. Traditional lending institutions often overlook these businesses, limiting their access to necessary capital and resources for growth. Furthermore, the digital divide exacerbates these challenges, preventing these businesses from fully utilizing technology to enhance their operations and competitiveness. Our goal is to bridge these gaps through innovative, community-centric lending practices and technological solutions. Through deploying alternative data from community partners, enhancing training/resources, and fostering genuine community engagement, we aim to create an inclusive, equitable financial ecosystem. This approach not only supports the immediate financial needs of these businesses but empowers them with tools and knowledge to thrive in the long-term.

The grant will support the expansion of TMC Community Capital's community-based underwriting pilot in the Los Angeles region. This initiative enhances loan assessments by leveraging alternative data from local community partners, fostering a deep understanding of the unique dynamics of underserved small businesses. The project will bolster collaborations with local organizations, providing critical insights to inform our underwriting process and address the specific needs of women-owned, Black, Brown, and low-income entrepreneurs.
Key aspects of the project include comprehensive training for community partners, ensuring they are equipped to support the underwriting process through effective data collection and analysis. We will also continue to invest in developing a partner portal platform to streamline data sharing and communication, facilitating efficient and accurate loan assessments.
Importantly, the grant will fuel ongoing research and development efforts to leverage technology in bridging the digital divide and empowering communities. Our R&D approach prioritizes genuine community engagement, ensuring solutions are effective, user-friendly, and culturally relevant. Building on previous efforts, we will refine the Milestone Loan product and its integrated technology system based on community feedback, tailoring our offerings to address specific needs and challenges.

Small businesses, especially those owned by women, Black, Brown, and low-income entrepreneurs, will gain greater access to capital through our innovative community-based underwriting and green financing micro-loans. This increased financial access will enable these businesses to grow, create jobs, and stimulate local economic activity, fostering a more vibrant and resilient economy.
Due to leveraging community insights and alternative data, we have built a more inclusive and equitable financial ecosystem. This directly empowers entrepreneurs who have traditionally been marginalized, giving them the resources and support needed to thrive. Environmental sustainability will also see a boost through our green financing initiatives, which will help businesses implement cleaner, more efficient practices. This will contribute to the revitalization of neighborhoods, reducing pollution and improving public health outcomes in communities that have long suffered from environmental injustices.

As an early-stage project, we will define and measure success through several key metrics. First, we will track the number and diversity of small businesses receiving loans, particularly focusing on women-owned, Black, Brown, and low-income entrepreneurs. We will also measure the repayment rates, aiming to maintain our current 100% rate, as an indicator of financial stability and success among borrowers. We will assess the impact on job creation and local economic activity by monitoring the number of jobs created and the economic benefits generated by our loans. Success will also be measured by the level of community engagement and satisfaction, gathered through surveys and feedback from participating businesses and community partners.
Our ultimate goal is to create a more inclusive, sustainable, and equitable financial ecosystem in Los Angeles County.