One Year Later: Despite Kept Promises, Funding Challenges Remain for MBEs and WBEs

October 26, 2021
The C2FO Team

Committed to reversing age-old, unfair and discriminatory financial practices, funders increased supplies of capital to minority business owners in 2021. 

Though much work remains, minority business enterprises (MBEs) have garnered substantial new funding since mid-2020, when banks, retailers and venture capital firms (VCs) made substantial commitments to help smaller, often entrepreneurial businesses with capital or growth opportunities. 

The tragic deaths of George Floyd, Breonna Taylor and other Black Americans — and the social movements that have followed — sparked declarations by many companies to tackle the systemic inequality that exists in housing, employment and lending practices. 

According to the National Minority Supplier Development Council, an MBE is a business at least 51% owned by Asian Indian, Asian Pacific, Black, Hispanic or Native American United States citizens. They’ve traditionally struggled with funding, representation and other issues that are also shared by WBEs — woman-owned business enterprises. 

Brand names pledged generous resources to help businesses and communities. 

Led by banks, organizations announced their intentions through online, offline and in-house messaging amid 2020’s unrest. Some representative examples from companies include: 

  • Bank of America committed to “helping communities advance racial equality and economic opportunity.”

  • Wells Fargo announced that it was “developing actions that will meaningfully contribute to necessary change.” 

  • In a memo to associates, Walmart President and CEO Doug McMillon stated that listening and learning would accompany its actions intended to “influence permanent change in systems that are complex and long-standing.” 

Here are some highlights of the progress made by several industry leaders’ diversity and inclusion initiatives: 


The New York-based investment bank announced a $1 billion commitment in September 2020 named Action for Racial Equity. Its intentions are to improve access to funding in communities of color, invest in Black-owned businesses, expand homeownership for Black Americans and advance the adoption of anti-racist practices in the financial services industry. Citi has stated these early results

  • Allocated more than $50 million to minority depository institutions (MDIs).

  • Invested more than $200 million — to be managed by Black investment managers — to preserve affordable multifamily rental housing.

  • Committed to providing access to safe and affordable bank accounts with no traditional monthly fees.

Bank of America

In June 2020, B of A committed $1 billion over four years to support small business, wellness, job training and housing initiatives. That commitment was extended by 25% in March 2021 to five years and $1.25 billion. A September 2021 full-page newspaper ad announced progress to date, including:  

  • $300 million to 100 equity funds as capital for diverse entrepreneurs and small business owners.

  • $10 million granted to fund the Center for Black Entrepreneurship in partnership with Spelman and Morehouse colleges.

  • $25 million to 21 historically Black colleges and universities, Hispanic-serving institutions (HSIs) and community colleges in support of job skill training and placement. 


Through its Center for Racial Equity in June 2020, Walmart pledged $100 million in grants over five years with a focus on finance, health, education, criminal justice and racial solidarity. As of February 2021, more than $14 million had been awarded to 16 different nonprofit organizations. The largest grant, $5 million, will help make loans or grants to community organizations in Atlanta and Chicago that are increasing access to affordable and healthy food in communities of color.


Based in Minneapolis, near where the George Floyd tragedy occurred, Target committed to programs in 2020 that would grow its spending with Black-owned businesses, including suppliers, advertising and media partners. It also announced a focus to increase Black team members by 20% across all levels of the company. 

Though its progress is quantified differently than banks’, Target stated in May 2021 that it had grown employment of Black senior leaders by 40%, expanded its Black-owned business spending commitment by the end of 2025 to more than $2 billion and logged nearly 8,000 pro bono hours supporting Minneapolis-area Black businesses.

Venture capital firms are also stepping up. 

Many VC firms share the ideals of Boston-based Bain Capital, which manages more than $140 billion in asset classes including private equity. Bain’s racial equity and social justice commitments include: 

  • Partners’ investments of $100 million over 10 years in socially conscious nonprofits, plus doubling employees’ matching gifts. 

  • Improving diverse representation on portfolio company’s boards and management.

  • Expanding employment opportunities for underrepresented minorities at portfolio companies.

  • Greater support for local businesses owned by underrepresented minorities and women. 

According to Crunchbase, Black startup founders have received substantially greater funding since mid-2020:  

  • $589 million raised July through December 2020 was 33% more than the $442 million raised the six prior months. 

  • $1.8 billion raised January through June 2021 was four times the $442 million raised January through June 2020 and 80% more than the $1 billion raised in all of 2020. 

Though the sector received less than 1.5% of all startup funding in January through June 2021, increased levels of general activity offer optimistic reasons for growth. VCs committed to Black-owned businesses’ success are increasing in numbers and visibility. The VC ecosystem is becoming more diverse, with publications like Forbes providing coverage.

Still, many legacy issues and norms will need to be overcome for more of the funds committed by banks and VCs to reach the growing number of WBEs, said to be 30% of all US businesses, according to the Center for Women in Business, and the more than 1 million MBEs, according to a January 2021 US Census report

As much was stated at a recent forum about VC backing hosted by Startland News of Kansas City: 

  • Joshua Lewis, the Black male CEO of entertainment app Updown Nightlife, explained that Black entrepreneurs are typically disadvantaged from the beginning of the funding-seeking process because they weren’t raised or don’t have the resources to understand what venture capital is. According to a 2017 Federal Reserve report referencing 2014 data, Black or African American business owners were twice as likely as white business owners to get turned down for bank loans and, by a difference of more than 10 percentage points, were denied credit cards, home equity-based credit, trade credit and VC investments. 

  • Heidi Lehmann, an LGBTQ community member, serial entrepreneur and president and COO of tech startup Kenzen, said that WBEs share the VC challenge and others involving gender or identity that often divide traditional lenders and aspiring entrepreneurs. Again according to Crunchbase, female startup founders raised just 2.2% of the $143 billion raised by all US startups in 2020. 

Providing access to low-cost funding for diverse-owned and underrepresented companies is a core value at C2FO. To ensure all businesses have the capital they need to grow, C2FO has helped retailers like Albertsons and others launch Diversity and Inclusion (D&I) Marketplaces on the C2FO platform. These programs provide funding to qualified diverse-owned suppliers at significantly lower rates. D&I Marketplaces are one way to drive sustainable and equitable access to capital throughout your supply chain.

In Conclusion

Since mid-2020, organizations have generously pledged to reverse long-established societal inequalities impacting MBE and WBE communities. And one year later, many supporters have delivered on their promises to make life-enhancing resources available. Though it may take years or decades to fully realize these broad efforts, the beneficiaries have greater reason for hope than when the 2020s began. 

Editor's Note: C2FO is a Startland News contributor.

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