Landing a big contract is a dream come true for many small businesses, but at the same time, it can be an overwhelming endeavor if it comes without necessary access to working capital for additional insurance, new equipment, payroll and other needs.
But two local groups are helping those small businesses move closer to realizing their dreams, teaming up to help secure a major need – financing.
Private impact investment firm Mission Driven Finance and the nonprofit Council for Supplier Diversity are now partnering to provide local diverse-owned small businesses better access to flexible funding so that those businesses can succeed, thrive and grow – and compete for sought-after municipal and corporate contracts.
Mission Driven Finance, which is based out of Old Town, is championing the program that will bring up to $10 million to be dispersed to minority-owned and other diverse-owned small businesses in San Diego and Imperial counties. The effort is part of Mission Driven Finance’s Advance Strategy, a fund formed to create economic opportunities in underrepresented communities.
Through the partnership with the Mira Mesa-headquartered Council for Supplier Diversity, a Subcontractor Financing Program will provide the capital the minority-owned companies need for expansion and delivery on major contracts.
Reconnecting a Disconnect
Through the new program, qualified diverse-owned small businesses will be able to secure amounts ranging from $100,000 to $500,000.
“There’s a disconnect between capital and community and we’re trying to reconnect,” said Lauren Grattan, chief community officer and co-founder of Mission Driven Finance.
Grattan said Mission Driven Finance is working to make sure that capital “isn’t a barrier for diverse-owned businesses to grow.”
She said that Mission Driven Finance embraces inclusive lending processes, like not using personal credit scores and guarantees – which can be steeped in racist biases – and offering culturally relevant investment options.
Mission Driven Finance is an impact investment firm committed to closing funding gaps to close opportunity gaps and achieve social goals that benefit society. Launched in 2016, the firm has been growing the San Diego impact investing ecosystem through the years and has enabled more than $25 million to flow into San Diego County.
It also helps with funding for needs outside the area, helping push out more to communities throughout California and elsewhere to the tune of more than $50 million overall.
Navigating the Pitfalls of Growth
Grattan said that Mission Driven Finance knows how important it is to have capital providers that understand and can help navigate pitfalls of growth. It also offers coaching to help businesses get through what can be complex processes involved with financing.
The Council for Supplier Diversity focuses on helping minority business enterprises, disadvantaged business enterprises, women business enterprises and service-disabled veterans to successfully compete in San Diego’s multi-billion dollar public and private supply chains.
The Council for Supplier Diversity, which was founded in 1999, strives to provide a gateway for diverse suppliers to expand and increase their bottom line. Through training and interaction with corporate members, the council helps to build supplier capacity and revenue growth opportunities for minority, women, service disabled veterans, and other diverse businesses.
Ron Garnett, president and CEO of the Council for Supplier Diversity in San Diego said that working with a community lender like Mission Driven Finance “is critical to help diverse suppliers in our region be as competitive as possible in bidding for projects.”
Garnett said that both groups “have the common goal of wanting to see our communities succeed.”
Grattan said that she was once on the small business advisory council for the San Diego Regional Economic Development Corporation and is aware of the group’s inclusive growth strategy and for San Diego County.
The SDEDC’s inclusive growth goals includes equipping small businesses to compete and building a strong local talent pipeline. “The biggest piece for us is trying to ensure that small businesses can access capital so they can deliver on the contracts they get,” Grattan said.
Mission Driven Finance
CO-FOUNDERS: David Lynn, Lauren Grattan
HEADQUARTERS: Old Town
BUSINESS: Financial services
SOCIAL IMPACT: MDF makes loans for small business and nonprofits so they can reach their goals for the community and is a certified B Corp.
NOTABLE: The firm has helped more than $25 million flow into the San Diego area.
Council for Supplier Diversity
PRESIDENT and CEO: Ron Garnett
HEADQUARTERS: Mira Mesa
BUSINESS: Nonprofit economic driver
SOCIAL IMPACT: Tagline is leveraging supplier diversity for economic empowerment in underserved communities.
NOTABLE: The Council supports more than 13,000 diverse suppliers in California.