Darryl Goodner co-owns Louisville Cream, a small batch ice cream company that uses local grass-fed milk to make new flavors every month. Starting the business from scratch was nearly impossible. Goodner is one of many hard-working entrepreneurs struggling to identify adequate sources of capital to grow the business. Roughly 8,000 small businesses are denied traditional bank financing each day, and many are forced to borrow capital from online lenders with exorbitant APRs. Even though these entrepreneurs are proving that they’re able to grow successful businesses, the massive leap from startup to bankability is a constant threat to their existence.

Few sayings capture the American Dream mindset in a more quintessential way than “picking yourself up by your bootstraps” and few mindsets very easily rob a person of resources. Of course, it is impossible to pull yourself up by your bootstraps. The misuse of this quote as a hopeful mantra for independent self-advancement is quite ironic. In fact, it seems those most associated with the notion of becoming self-made at the beginnings of America would likely be appalled at the thought of being solely responsible for their own success. As it turns out, alternative facts have been around for ages as many of the biographies of self-made men like Benjamin Franklin were rewritten to capitalize on the country’s desire for success literature (you have to minimize the effect of luck, timing, and skin color when selling a manual for success).

We could do a better job to pioneer new methods for funding entrepreneurs earlier in their startup journey.

In the United States, this bootstrap mentality is so prevalent and widely accepted that it is rarely considered as a factor in our declining rate of entrepreneurship. While the need for grit in every entrepreneur is undeniable, we as Americans could do a better job to pioneer new methods for funding entrepreneurs earlier in their startup journey. A lack of access to capital for small businesses is truly a crisis for our country.

Case in point, if just one in three small businesses were able to hire an additional employee, we would have zero unemployment. In addition to the services and products that enhance all of our lives, these businesses are culture creators. Vibrant local coffee shops, eateries, bicycle stores and other retail spots play a critical role in the enjoyment of life. A small business’ impact on economic growth exceeds their own immediate efforts as city leaders dine and explore these smaller enterprises while they court larger corporations to draw them to the area. The identity of a city is closely linked to its small business scene.

Louisville Cream Entrepreneur Startup Minority

Through the social underwriting process of the Growth Loan, Louisville Cream was able to leverage a mixture of character, performance, and potential to access a large portion of the capital they needed to expand their business.

However, our small business owners cite access to capital is a major issue. Outside of personal savings, personal networks are the next place an entrepreneur looks for the capital they need to launch. The stark reality, however, is that the wealth of those networks varies drastically based on uncontrollable factors of race and gender. Countless studies confirm an unnerving gap in wealth between white and non-white, as well as men and women. While studies abound on the reasons for such gaps, we think solutions rooted in sustainability versus scalability are key to increasing access to capital.

Small business owners are the unsung heroes in communities and deserve a better solution that enables their business to flourish. Every day, these hard working entrepreneurs struggle to identify adequate sources of capital. The historical methods of evaluation should not be done away with, but history has proven that evaluating small and large businesses, in the same manner, limits the flow of capital to these valuable components of our communities.

Entrepreneurs have received $400,000 in loans without the need for financial collateral.

David Taliaferro
Director of Microfinance

We believe the most sustainable access to capital solutions are based on common alternative assets that can be owned by anyone – a unique competitive advantage, practical strategies backed by reasonable evidence, character, planning, related experience, hustle, etc. Access Ventures is so committed to this belief that we’ve already approved more than $400,000 in loans to small businesses through our microloan product.

Moelicious BBQ Startup Minority Entrepreneurs

The Growth Loan, which relies on these alternative assets, is necessarily relational. Not relational in a token sort of way, but in the locking of arms that comes from mutual success. It looks beyond credit score and financial collateral by providing space and time for a thoughtful review of character and strategy. We guard against prioritizing only our own profit by putting effort into terms that increase a borrower’s ability to repay and humanize the review process by requiring decision makers to meet with applicants rather than basing decisions solely on the numbers.

A far cry from the myth of the self-made man and pressure to achieve independently, we are believers in moving forward, together. Community and relationship are too often overlooked as the foundation for sustainable solutions. And in order to move forward together, we must all be included.

Share your thoughts