Harris County Commissioner Rodney Ellis on Tuesday said he’s proud Commissioner Court approved signing a contract with a nonprofit economic investment company to create the county’s first-ever revolving loan program for small businesses, including those owned by minorities and women.
The loan program, called the Harris County Opportunity Fund, will start with $17 million – $8 million from the American Rescue Plan Act (ARPA) and a matching $9 million from the PeopleFund – that will be loaned to businesses to erase gender and racial wealth and business ownership gaps. The money businesses use to repay the loans goes back into the fund for future borrowers to create a Revolving Loan Fund that has a sustainable funding source for Harris County.
“I strongly believe in the Harris County Opportunity Fund’s potential to drive economic growth, foster innovation, and create jobs within Harris County,” Commissioner Ellis said. “With Harris County’s first-ever Revolving Loan Fund, we will address longstanding disparities in access to financial resources, thereby leveling the playing field for all entrepreneurs to thrive.”
The Harris County Opportunity Fund, which will be managed by the county’s Department of Economic Equity and Opportunity (DEEO), will target entrepreneurs at different stages through low-interest micro-loans up to $50,000 and growth loans up to $250,000. The fund provides a 2% discount on interest rates.
“DEEO is very excited about the launch of Harris County Opportunity Fund aimed at providing critical access to capital to small businesses grappling with the aftermath of the COVID-19 pandemic,” said Estella Gonzalez, DEEO’s executive director. "Small businesses are the backbone of our economy. By offering flexible terms and low-interest rates, we aim to break down the barriers that historically hindered entrepreneurs from getting loans needed to grow and prosper.”
The Revolving Loan Fund seeks to empower entrepreneurs, particularly those facing challenges in accessing traditional sources of capital, to thrive in a post-pandemic economy.
The loans will be available to small businesses in Harris County to increase investments in firms that may have been overlooked by traditional lenders. The Opportunity Fund has an aspirational goal to invest 65% of capital in businesses owned by people of color and 50% in women-owned firms. The Fund will prioritize projects that contribute to job creation or retention.
According to the Small Business Administration, when Black businesses attempted to establish relationships with banks, credit unions, and other financial institutions, 53% were unable to secure the funding they needed, compared to 25% of White borrowers. Expanding access to capital for small business owners, especially those owned by women and people of color, is essential to ensuring those businesses can unlock their full potential, create jobs in their communities, and fairly compete in a thriving economy.