Worcester Business Journal

30 Worcester Business Journal | September 5, 2022 | wbjournal.com A s a social worker helping children, families, and adults with substance- use disorders in North Central Massachusetts, Kimatra Maxwell noticed a gap in the services people oen received. ere weren't enough skilled and trained people whose backgrounds matched those of the people they served, especially people of color. "I worked on teams that are predominantly white, sometimes being the only person of color that a family could relate to," she said. Maxwell had an idea for a business: a coaching and counseling service to intentionally focus on the needs of a diverse range of clients. "So in 2018, I called my partner and I'm like 'I'm quitting my job,'" she said. Maxwell said she was lucky in some ways. Her partner was supportive. Her mother invested the first $1,000 to get her new company, Connecting to Greatness, incorporated and insured. But the early years were tough. She and her partner found themselves cutting back on essentials. ey racked up credit card debt. Some months, they couldn't pay the rent on time, though, fortunately, their long-time landlord was understanding. By 2020, Maxwell said, she was making three times what she'd earned as a salaried social worker. But, when she approached a bank for a loan to help invest in growing the business, she was told the business's revenues weren't high enough to make that happen. Maxwell is far from alone. According to the 2021 report "e Color of the Capital Gap" by Boston Indicators and the Boston Foundation, most entrepreneurs use personal or family savings to start a business. Yet, because of a history of racism and unequal treatment, white families have five to eight times the wealth of Black and Latino families on average. And, when entrepreneurs of color turn to banks and other investors, research shows they're oen given less consideration than white founders in similar circumstances. is helps explain why, although Massachusett is about 68% white, white people make up 82% of the state's entrepreneurs. Connecting entrepreneurs with financing To help close this gap, a number of programs and institutions help provide financial support for underserved communities. e North Central Massachusetts Development Corp., the economic development arm of the North Central Massachusetts Chamber of Commerce, works with the U.S. Small Business Administration as a community advantage lender, which helps it support early stage companies that may struggle to qualify for bank loans or win investors. "A lot of banks, they're very, very regulated, so it's difficult for them to take risks," chamber President and CEO Closing the gap for entrepreneurs of color Central Massachusetts business associations provide smaller loans for minority-owned companies to help correct historic injustices in the financing system BY LIVIA GERSHON Special to WBJ F O C U S D I V E R S I T Y & I N C L U S I O N Kimatra Maxwell was unable to obtain a bank loan to support her business, so she relied on family and credit card debt until the North Central Massachusetts Development Corp. provided her with financing. PHOTO/COURTESY OF CONNECTING TO GREATNESS

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