TUCSON, Ariz. (KGUN) — As the Small Business Administration (SBA) slashed its workforce by 43 percent in March—including major cuts to diversity, equity, and inclusion (DEI) programs—local organizations in Tucson are stepping up to fill the gap.
The impact of those federal cutbacks is being felt across the country, but in Tucson, nonprofits like Startup Tucson and the Community Investment Corporation (CIC) are making sure BIPOC-owned businesses aren’t left behind.
At Slow Body Brewery in Midtown, entrepreneurs gathered to celebrate the first anniversary of BIPOC Entrepreneurs Day, a city-recognized day of recognition for Black, Indigenous, and People of Color (BIPOC) business owners.
Mayor Regina Romero and the Pima County Board of Supervisors officially proclaimed May 1 as BIPOC Entrepreneurs Day in 2024, underscoring the city’s commitment to inclusive economic development.
Startup Tucson and CIC have been running the BIPOC Loan Fund since 2020. It is a microloan program designed to provide capital to BIPOC entrepreneurs who often face barriers to traditional financing. Each loan ranges between $500 and $10,000 and comes with a fixed interest rate of just 3% over four years—terms designed to support early-stage growth.
The fund has proven to be more important than ever as cuts to DEI programs continue in Arizona and nationwide.
“All of us small businesses and nonprofits have been impacted over the last several months, and we do serve in a crucial time in this crucial area of giving money to BIPOC people,“ said Keneshia Raymond, Director of Entrepreneurship Success & Access to Capital at Startup Tucson. “We don’t want businesses to be scared. We will continue to stand out and step up for these businesses.”
The funding has already made a tangible difference.
Andrew Wong, owner of Huhu’s House of Dumplings in Phoenix, recently received a loan from the fund. He started the business in 2023, specializing in gluten-free dumplings, a product rarely found in the state. He got the idea from his mother, who runs a business making gluten-free dumplings in their native Australia.
Wong plans to focus the financing on packaging, enabling him to sell his product in stores. “It’s not easy to get funding,” Wong said. “Getting loans can always be a challenge when you’re a small business. So I thought that sounds like a great program, let’s have a go. It’s also a great test to see if customers respond and see if they have the belief and support in my ability to succeed.”
Raymond says the fund is designed for those who are typically turned away from commercial banks due to credit checks or other criteria that may disqualify their chances of receiving a loan. She says the BIPOC loan qualifications rely more on character, need and fit within the community.
“We’re the only loan in Arizona of this kind,” Raymond said. “They’re coming to us because we understand what they’re going through. We’re here to give them a chance.”
According to the New York Fed, BIPOC businesses are half as likely to receive the full amount of financing they apply for, compared to white-owned businesses. Programs like the BIPOC Loan Fund are designed to counteract this disparity.
Raymond says the loan fund helps entrepreneurs move from operating out of their homes to running fully scaled commercial operations. “They come to us at a stuck point,” she said. “And we help them grow.”
The focus on character over raw numbers was a lifeline for Jennifer O’Neill, founder of Beautiful Little Things, who secured a loan two years ago. The shop carries items made by women entrepreneurs across the world, and holds workshops for budding women entrepreneurs.
“It was very difficult for me to be approved for a business loan,” she said. “With different challenges I’ve had, I looked like a risk on paper. So, to have a merit-based loan process where I’m able to pitch who I am and what I do was very appealing to me.
Prior to receiving a loan from the BIPOC fund, O’Neill was primarily selling merchandise online and through pop-up events. “I was kind of tired of lugging everything around,” she said. “When I received the loan, I was able to go into a brick-and-mortar and set myself up with equipment and things I needed to run it successfully.”
O’Neill says the business has grown since moving into a brick-and-mortar location. “My next step is adding some employees,” she said.
O’Neill has advice for business owners in her position. “Sometimes you get used to being turned down and you don’t try anymore,” she said. “I want to encourage people to just try. If you’re not ready, they can help you get ready.”
You can find more information about the BIPOC Loan Fund, such as how to apply, on the program’s website.
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Joel Foster is a multimedia journalist at KGUN 9 who previously worked as an English teacher in both Boston and the Tucson area. Joel has experience working with web, print and video in the tech, finance, nonprofit and the public sectors. In his off-time, you might catch Joel taking part in Tucson's local comedy scene. Share your story ideas with Joel at joel.foster@kgun9.com, or by connecting on Facebook, Instagram or X.
