[Senate Hearing 119-349]
[From the U.S. Government Publishing Office]
S. Hrg. 119-349
FIELD HEARING: THE ROLE OF ENTREPRENEUR-
SHIP IN REDUCING THE WEALTH GAP
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HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP
of the
UNITED STATES SENATE
ONE HUNDRED NINETEENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 9, 2026
__________
Printed for the use of the Committee on Small Business and
Entrepreneurship
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
63-358 WASHINGTON : 2026
=======================================================================
COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED NINETEENTH CONGRESS
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JONI ERNST, Iowa, Chair
EDWARD J. MARKEY, Massachusetts, Ranking Member
JAMES E. RISCH, Idaho MARIA CANTWELL, Washington
RAND PAUL, Kentucky JEANNE SHAHEEN, New Hampshire
TIM SCOTT, South Carolina CORY A. BOOKER, New Jersey
TODD YOUNG, Indiana CHRISTOPHER A. COONS, Delaware
JOSH HAWLEY, Missouri MAZIE K. HIRONO, Hawaii
TED BUDD, North Carolina JACKY ROSEN, Nevada
JOHN R. CURTIS, Utah JOHN W. HICKENLOOPER, Colorado
JAMES C. JUSTICE, West Virginia ADAM B. SCHIFF, California
JON HUSTED, Ohio
Meredith West, Republican Staff Director
Sean Moore, Democratic Staff Director
C O N T E N T S
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FEBRUARY 9, 2026
Opening Statements
Page
Edward J. Markey, U.S. Senator from Massachusetts................ 1
Witnesses
Ms. Mechalle Brown, President, 7uice Foundation, on Behalf of
Jaylen Brown, Waltham, MA...................................... 7
Prepared Statement........................................... 9
Mrs. Lauren Holiday, Founder, JLH Social Impact Fund, Los
Angeles, CA.................................................... 11
Prepared Statement........................................... 13
Mr. Jrue Holiday, Founder, JLH Social Impact Fund, Los Angeles,
CA
Prepared Statement........................................... 16
Ms. Renee King, CEO, We Are The Funders, New York, NY............ 21
Prepared Statement........................................... 24
Mr. Keith A. Mahoney, Vice President for Communications and
Public Affairs, The Boston Foundation, Boston, MA.............. 27
Prepared Statement........................................... 30
Ms. Nicole Obi, President and CEO, Black Economic Council of
Massachusetts, Roxbury Crossing, MA............................ 34
Prepared Statement........................................... 36
Mr. Karim Hill, President, BDC Community Capital Corporation,
Wakefield, MA.................................................. 38
Prepared Statement........................................... 41
Additional Letters/Statements for the Record
Center for Entrepreneurial Opportunity--Statement Dated February
9, 2026........................................................ 49
THE ROLE OF ENTREPRENEURSHIP IN REDUCING THE WEALTH GAP
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MONDAY, FEBRUARY 9, 2026
United States Senate,
Committee on Small Business
and Entrepreneurship,
Washington, DC.
The committee met, pursuant to notice, at 12:05 p.m., in
1st Floor Student Commons, Building 3 Academic Building,
Roxbury Community College, 1234 Columbus Avenue, Roxbury,
Massachusetts 02120, Hon. Ed Markey, presiding.
Present: Senator Markey [presiding].
OPENING STATEMENT OF SENATOR MARKEY
Senator Markey. Good afternoon, everyone, and thank you for
being here today. The Senate Committee on Small Business and
Entrepreneurship will come to order. We have a very important
hearing today. I want to first turn it to Lauretta Siggers-
Benton, the Chief Operating Officer for Roxbury Community
College for an introduction. Lauretta.
Ms. Siggers-Benton. Thank you, Senator. Good afternoon,
Senator Markey and distinguished witnesses and guests. On
behalf of the President Jonathan Jefferson, Roxbury Community
College's Board of trustees, and our broader community, we want
to welcome you here to Roxbury Community College today. Thank
you for choosing RCC as the site for this important hearing on
such a critical role that entrepreneurship plays in the closing
racial wealth gap.
My name as he mentioned, is Lauretta Siggers-Benton. I'm
the Chief Operating Officer here at the college. I'm also
serving as an interim role right now for advancement. So, we're
also raising money for our college, and I'm honored to
represent the college today to share just a few ways that
Roxbury Community College is supporting entrepreneurs across
our service area.
Roxbury Community College is deeply committed to economic
mobility, equity, and opportunity. Two of our key initiatives
to do this through is through our Center for Economic and
Social Justice. We call that the CESJ, and the Business
Innovation Center, which is our BIC.
These initiatives are at the forefront of our work. Today
we provide residents and students with the services, support,
and connections to capital necessary for long-term success.
Established in 2022, the Center for Economic and Social Justice
focuses on preparing students to secure employment and develop
their own small businesses and high growth industries such as
green technology and healthcare.
The CESJ is also leading the implementation of Roxbury's
new Learn and Earn model, which will ensure that every student
has the opportunity to complete a paid credit bearing
internship before graduating here from Roxbury Community
College. This game changing approach removes the impossible
choice many students face between working and staying enrolled
here at the college.
We're creating a clear and efficient pathway to economic
mobility. And I want to extend a special thank you to Senator
Markey for securing the CDS funding that allowed RCC to begin
transforming the historic David Dudley House into the future
home of the Center for Economic and Social Justice. So, can I
just give him a round of applause? It's because of him we
received that funding.
We are continuing to raise funds for this capital project
and look forward to welcoming you back to the campus for the
groundbreaking when this is all complete. The Business
Innovation Center, or the BIC, as I referred to earlier,
supports aspiring entrepreneurs by providing practical
knowledge, mentorship, and access to resources.
Since opening last year, we have served over 668
individuals, and they have utilized the center. And about,
approximately one third of that is our own students, and then
two thirds of that are people out in the community. And so,
we're excited again that we have branched this out, not just to
our students, but for those in the community as well.
The BIC offers one-on-one mentorship, and introductory
business planning programs and informational sessions with key
partners to provide them access. And we provide, as I
mentioned, provide the access to physical space and technology
essential for success.
To maximize the impact, the BIC has built strong
partnerships with organizations, including many, I'll just name
a few here just in essence of time. The U.S. Small Business
Administration, Lawyers for Civil Rights, we connected with
Suffolk University Seed Program, Boston Main Street, just to
name a few. And we continue to align ourselves with other
mission partners. This is what we've tried to do is continue to
align ourselves with other opportunities that are out there.
Through the collaborations, the BIC has delivered a robust
series of business focus workshops and resources on a rolling
basis. So, this is happening now for both students and
community entrepreneurs, where we are opening our doors to
teach them how to own their own business through workshops.
Roxbury Community College is also proud to serve the SPARK
Bill, which is fully aligned with the mission and work of the
BIC. Together, the CESJ and the BIC will play central roles in
implementing Roxbury's 2025 to 2030 strategic goals known as
Roxbury 2030. The plan positions the college to lead with
clarity, purpose, and impact, focusing transparency, belonging,
and institutional accountability.
Grounded in the lived experiences of our students, the
expertise of our faculty and staff, and the insights of our
community and civic partners, the plan reflects both the
urgency and the promise of this moment.
We look forward to continue collaboration with you, Senator
Markey, representative Presley, and many others that have been
there for Roxbury Community College, and every one of you in
the room as we implement this plan, measure our success and
expand opportunities for lasting economic mobility.
Thank you again for your continued support in joining us
here today at Roxbury Community College.
Senator Markey. Beautiful. Thank you, thank you so much.
And we're honored to be joined by leaders from the Boston City
Council, but we're also joined by a champion on Beacon Hill, a
fighter every day for economic equality, but breaking down the
barriers to entering into this economic system. And she is
joining us right now. Senator Liz Miranda, would you like to
say a few words?
Ms. Miranda. Every time the Senator speaks, I feel like I
should put Reverend in front of his name. Do y'all get that
feeling as well? I'm happy to be here as the state senator, the
second Suffolk district. I see three of my city council
colleagues, I welcome you. And none of us can do this work
without the relationship that we have with both the Federal,
the State, and of local officials and the municipalities like
Roxbury.
I'm not going to be long, but it's actually afternoon,
right? I haven't finished my Dunkin Donuts yet. But as someone
who's been born and raised and owns a home in Roxbury, it's
always an honor to welcome you as partners and as leaders into
this community, especially those who just don't talk about it.
But folks that actually live and work toward equity every day,
but they show up and they do the work alongside us.
Today, I'm proud to welcome my colleagues and my friend Ed
Markey, back to Roxbury for the Senate Small Business Committee
field hearing on the role of entrepreneurship in reducing the
racial wealth gap. I know something about that as a former
entrepreneur, and I guess you're always an entrepreneur, right?
Once you start a business, regardless if you close it, you
always be an entrepreneur.
And Senator Markey, I just want to thank you. We've been on
this road to together supporting RCC and a lot of initiatives
for the last eight years that I've been in the legislature, and
you've always been present in our neighborhoods. You listen to
small businesses and our families, and you show up early and
you show up often, which I appreciate. And that consistency
really matters when you want that from your leadership.
And it's important to ground ourselves in where we actually
are though. We're gathered in a building that exists because
the community fought back. More than 50 years ago, black
leaders joined hands with leaders all throughout many
communities and fought for eight lane highway to not exist in
our communities. And there would be no Roxbury Community
College if that group of people did not succeed.
And because of them, not only are we here, but we're still
here, we're still rooted, and we're still building. We stand on
these shoulders of all of our ancestors today, and it's our
responsibility to fulfill the promises they actually fought
for. Not just as elected officials, but as people in community
as well.
So here in Roxbury, we know that talent is everywhere, but
the opportunity is not. We have entrepreneurs, we have
innovators, small business owners, and dreamers on every block.
What they need is access to capital. They need contracts, and
they need actual, real investment.
If we are serious about closing the racial wealth gap in
the Commonwealth of Massachusetts, that is actually widening
and the pay gender gap that is actually widening. If we're
serious about doing that, we have to be serious about
supporting minority- and women-owned businesses and creating
the pathways to ownership and generational wealth.
I want to thank you because today is about solutions, and
I'm grateful you chose to hold it right here in my favorite
place in the city of Boston. Welcome back to Roxbury, Senator.
We are glad you're here, and we are ready to get to work with
you. Thank you.
Senator Markey. Thank you, thank you Senator so much. And
we're joined by city councilor Enrique Pepen, who is sitting
right here in the front row, city councilor Sharon Durkan
sitting here in the front row, city counselor John Fitzgerald
sitting right here in the front row, all here, front and
center, trying to build this as a community issue. Would each
of you like to get up on one minute and say something at the
opening?
Unidentified Speaker. Want to hear Senator, thank you.
Senator Markey. So, thanks to everyone for joining us here
today. I'm honored to be holding this field hearing entitled,
``The Role of Entrepreneurship in Reducing the Racial Wealth
Gap,'' at RCC because of what this institution stands for,
affordable quality education for everyone. And this is without
question the key, because education and entrepreneurship go
together like peanut butter and jelly, it's just that you need
them both to make the sandwich work.
And if we're going to deal with these gaps in racial
wealth, then it begins with this institution, along with all of
the access to capital, which then accompanies people leaving
here to go off into the world.
Roxbury Community College's Center for Economic and Social
Justice and the New Business Innovation Center are breaking
down barriers on a daily basis. And these programs offer the
education, the skills, the mentorship opportunities to build
wealth through entrepreneurship.
The Roxbury Community College has partnered with Jaylen
Brown, Jrue Holiday, Lauren Holiday, to launch and support the
Boston Creator Incubator and Accelerator. This collaboration
supports creators from underinvested communities with the
resources and the support which they need in order to thrive.
Their work builds on and relies on the research network and
the capital that organizations like the Black Economic Council
of Massachusetts BECMA, BDC Capital Corporation, We Are The
Funders, and Boston Foundation provide. These witnesses are a
shining example of what can happen when a community comes
together, collaborates and centers community needs. That's what
this hearing is all about.
It's about a whole of community approach bringing together
government, higher education, research institutions, investors,
and visionaries. It is only with a combination of these systems
and intentional programs and policies that we will harness
entrepreneurship of true potential to close the racial wealth
gap.
For more than a decade, the Federal Reserve of Boston
reported that median net worth of Boston's black neighborhoods
was just $8, compared with more than $247,000 for white
communities. That's a decade ago. An update to that report is
expected later this year. But it doesn't take another report to
know that we still have a lot of work to do.
The racial wealth gap has widened over generations because
of unjust policies that exclude systematically and discriminate
against and ultimately restrict people of color from the means
to accumulate wealth. This is most evident in the challenges
that black-owned businesses face when trying to get a loan to
help their businesses succeed.
In Massachusetts, 68 percent of black-owned businesses are
concerned about access to capital, double that of white owned
businesses. I'll say that again. Twice as many black owned
businesses have a problem with access to capital as white owned
businesses.
That concern is well founded. About two thirds of
entrepreneurs use personal or family savings to start a
business. That means those without generational wealth start at
a disadvantage. In fact, black-owned businesses are more likely
to apply for financing, but twice as likely to be denied as are
white businesses. And that is unacceptable.
It is our responsibility to support efforts to rectify
historical injustices and offer real opportunities. So, I've
been proud to fight with Senator Warren and Congresswoman
Ayanna Pressley to secure funding for organizations across the
Commonwealth like BECMA and RCC to support their efforts to
close the racial wealth gap. Our work is more important than
ever.
And this administration continues to turn back the clock on
progress by dismantling the Minority Business Development
Agency, the only Federal agency dedicated to helping minority
owned businesses, attempting to shut down community development
financial institutions, which largely deliver needed capital to
underserved communities, and barring immigrants, including
green card holders, refugees, and DACA recipients from
receiving small business administration loans.
This is not America first. This is hate first. Hate
directed at black and brown communities in our country who are
seeking to become a part of this economic engine of growth,
which is the envy of the world, but which has always had
barriers to entry. And they're only trying to make it more
difficult by what they have done just in their first year.
So, this is not progress. That's only propaganda. That's
all we're hearing, and it's not opportunity for all. It's just
an oligarchy for the few. We will not go backwards. We must
reimagine a brighter and more inclusive future for everyone.
One where we actually close the racial wealth gap. This gap
isn't just a moral and policy failure, it robs us of our full
potential as a society to not have everyone included in this
economic opportunity, which we call the United States.
That is why I am introducing the SPARK Act. So, my bill,
which supercharges the existing infrastructure with new grant
dollars for entities like Roxbury Community College, and
creates a new program that provides direct grants to
underserved entrepreneurs, direct grants to those
entrepreneurs. And that work mirrors the work that the groups
here are already doing. That's what we're going to be talking
about.
The SPARK Act would expand their work to reach
entrepreneurs shut out from opportunity. This is important
because a vision without funding is a hallucination. If we want
to have all these barriers broken down, if we want more black
and brown business people to be successful, we have to ensure
they have the funding. That's what my bill will do. The SPARK
Act is just the beginning, and I will continue to fight to
reduce the racial wealth gap at the highest levels of
government.
And while I won't be signing with the Celtics anytime soon,
I'm proud to be on a team with Jaylen and everyone here today
to uplift the next generation of underserved entrepreneurs and
work to close the racial wealth gap here in the Commonwealth
and across the country.
So, Jaylen's mother, Mechalle, who is here on behalf of
Jaylen today, they work in partnership on these issues, said,
``Who you are is measured by the mark you leave on the world.''
And to truly leave a mark on the world, you have to do the
right things and speak out against the wrong things. And today,
we are not agonizing, we're organizing to do the right things
and to speak out against the wrong things.
So, we thank everyone for being here today. We have an
incredible panel of experts who have joined us here today.
And I am the Senior Democrat on the Small Business
Committee for the United States Senate. And with a little bit
of luck, I'll be back here in January of next year as the
chairman of the Small Business Committee in the United States
Senate, and that's what we're going to work towards
accomplishing. And then we're putting the SPARK Act right at
the top of the small business agenda for the country.
So, I'm pleased to welcome our first panel of witnesses.
Ms. Mechalle Brown is the president of the 7uice Foundation, an
organization founded by her son, Jaylen Brown, that aims to
bridge the opportunity gap for youth in underserved
communities.
Mechalle is also an educator with experience as a professor
at Cambridge College and is an activist. She is here today to
testify both on her own behalf and on Jaylen's behalf as the
founder of the Boston Xchange, which provides underserved
entrepreneurs with resources, support, and opportunity for
their vision for what they can accomplish.
And next, we're going to have Mrs. Lauren Holiday. She and
Jrue Holiday, are the founders of JLH Social Impact Fund, which
supports initiatives that focus on equitable outcomes for black
and brown communities. JLH partners with local organizations
and leaders in order to provide the support which they need to
be successful, holistic support to minority communities.
And Ms. Lauren Holiday is also a former professional soccer
player, two-time Olympic Gold medalist, FIFA Women's World Cup
champion and is a Boston Breakers alum. And she is going to be
joining us virtually. And we look forward to hearing Lauren
from you in just a little bit. And thank you for all that you
do.
So, let's then begin with you, Mechalle, thank you for all
of your work. You and your son have helped to create incredible
framework for how we have to move forward much more rapidly.
And so, without further ado, welcome and whenever you feel
comfortable, please begin.
STATEMENT OF MS. MECHALLE BROWN (ON BEHALF OF JAYLEN BROWN),
PRESIDENT, 7UICE, WALTHAM, MASSACHUSETTS
Ms. Brown. Ranking Member, thank you so much for having me.
It's a pleasure to be here. As Senator Markey stated, my name
is Mechalle Brown. I'm the president of the 7uice Foundation,
which encompasses Boston Xchange and also Bridge programming.
Jaylen who plays for the Boston Celtics is the founder of
Boston Xchange and also the co-founder of the Boston Creator
Accelerator.
So, I am here today on Jaylen's behalf, myself as well, to
firsthand talk about why the SPARK Act matters. Not from just a
policy perspective, but from what I've seen firsthand in the
communities that we care about since living here for 10 years.
So, over the years, I've witnessed minority communities
face challenges, not because people weren't talented or
hardworking, but because the systems weren't built for us. Jobs
disappear, businesses close, wealth continues to leave our
neighborhoods instead of staying and circulating.
When Jaylen got to Boston, he wanted to do something
different, not just a charity or a one-time donation. He wanted
to build infrastructure, a platform where people could own,
create, and build businesses that last. And that's why he
founded Boston Xchange as well, to create pathways for
entrepreneurs, artists, and creators to access the resources,
networks, and support they need to succeed.
He knew that alone wasn't going to be enough. The founders
need mentorship. They also need access to capital. They need
partners who understand the barriers they're facing and to help
them to try to navigate through those issues as well. That's
why we partnered with Jrue and Lauren Holiday, MIT, Harvard
Business School, and Suffolk University to create the Boston
Creator Accelerator.
The beauty of the Boston Creator Accelerator is not just
one organization doing everything. It's a big collaboration.
MIT brought curriculum and technical expertise. Harvard brought
investor and readiness training. Suffolk brought legal support.
So, Jrue and Lauren brought learned experiences and funding,
and also a national lens on this. Boston Xchange provided the
platform and long-term commitment.
Together, we support the 10 founders over multiple years.
Not a quick program, but sustained support. Those founders have
also created jobs. They built real businesses, and they've done
it in communities such as Roxbury and Dorchester communities
that don't usually get this kind of investment.
What Jaylen and I have learned is that real economic power
comes from ownership. Not just having a job, but owning the
business, owning the building, and owning the block. When
communities have those resources to build and capital
circulates within the community, instead extracting it out,
that's when you create generational wealth, not just jobs.
But here's the reality. Most communities don't have the
infrastructure to make that happen. Founders are out here
grinding, they're out here taking a leap into entrepreneurship
because they have to, not because they want to, and we're
asking them to do it without the support system that makes the
business succeed.
The SPARK Act is about changing that. It would fund
accelerators and incubators across the country, not just for
six months, but for five years with the possibility of renewal.
So, it would require that kind of partnership that we built in
Boston: universities, lenders, community organizations working
all together. And it will provide founders with access to
capital, not just advice. That's how you turn survival into
sustainability and necessity into ownership.
When you invest in people and give them the infrastructure
to succeed, it begins not just to be a program, but real
sustained support. They build businesses, they create jobs,
wealth, and opportunity in their own communities. The SPARK Act
would make that possible nationwide, not just in one city, but
everywhere.
It is an honor to be included in this historic moment, and
we eagerly anticipate stories that the SPARK Act will ignite.
Thank you so much.
[The prepared statement of Ms. Brown follows.]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Markey. Okay. Thank you so much. Great testimony.
And now remotely we are going to hear from Lauren Holiday.
Welcome. And whenever you feel comfortable, please begin.
STATEMENT OF MRS. LAUREN HOLIDAY, FOUNDER, JLH SOCIAL IMPACT
FUND, LOS ANGELES, CALIFORNIA
Ms. Holiday. Hi, everyone. Ms. Mechalle, I wish I was there
to give you a hug. [Laughter.]
Ms. Brown. So sweet. I miss you.
Ms. Holiday. I miss you, too. Ranking Member, thank you for
this opportunity. My name is Lauren Holiday. I'm here today to
talk about why Senator Markey's SPARK Act matters, not just for
Boston, but for communities across the country.
Over the past several years, through the Jrue and Lauren
Holiday Social Impact Fund, we've had the privilege of
supporting entrepreneurs in cities nationwide. Boston, New
Orleans, Los Angeles, Milwaukee, Indianapolis, and beyond. What
we've learned is this: entrepreneurs don't fail because of the
lack of talent. They fail because the systems around them are
fragmented.
And when you're building in underserved communities, those
systems aren't just fragmented, they're often absent entirely.
What we've seen work is we didn't start with a theory. We
started listening to founders and asking, what do you actually
need? The answers were consistent across every city.
Long term support and short-term grants. Founders don't
need a check that disappears after six months. They need
partners who commit for years, who are there when revenue is
slow, when pivots are necessary, when the work gets hard.
Trusted relationships, not transactional. Businesses grow when
they're supported the way families support each other, with
patience, trust, and genuine investment in their success.
Coordination across institutions, not isolated efforts. Not
a single organization can provide everything a founder needs.
But when universities, lenders, accelerators, and community
partners work together, founders don't have to navigate alone.
Through our work in Boston, we supported an entrepreneur
named Tracy, the founder of Little Cocoa Bean, a children's
food business, rooted in community and culture. What got her
across the finish line wasn't a single grant or program, but
all of us together, wrapping around her, government partners,
philanthropy institutions, customers, community members,
operators, walking the journey with her.
That collective support helped Tracy open her newest
location at the Boston Children's Museum at the Seaport. And in
her own words, she could not have done this without people
staying in it with her from start to finish. That's the model
we've built through our work, through the Boston Creator
Accelerator, in partnership with Jaylen's Brown Boston Xchange,
MIT, Harvard Business School, and Suffolk University. And it's
the model we've seen work in other cities when the right
partners come together.
Why this needs to be national not just Boston. In Boston,
we received over 2000 applications for 10 spots. In New Orleans
founders told us the same story. Talent everywhere,
infrastructure nowhere. In Los Angeles, in Milwaukee, and every
city we've worked, the pattern is identical. Entrepreneurs are
taking the leap, not because they have an innovative dream but
because they have to feed their families.
Traditional employment is disappearing, industries are
restructuring, corporations are moving their workforce
offshore, and people are left with no other choice, but to bet
on themselves starting businesses out of necessity, not
aspiration. But survival without support leads to failure.
The SPARK Act recognizes that if we want entrepreneurship
to be a viable path for everyone, not just those with access to
wealth, and access to the elite networks and capital, we have
to invest in the institutions that can provide that support at
scale, not in one city. Everywhere.
What the SPARK Act gets right is this Bill reflects what
we've proven works. Multi-year commitments, five-year funding
with the possibility of renewal. That's what allows real
relationships to form and businesses to grow sustainability.
Required collaboration, the bill mandates partnerships between
universities, lenders, accelerators, and community
organizations. That coordination is what makes ecosystems
function.
Place-based design. Every community is different. The bill
recognizes that solutions have to be rooted locally, led by
people who understand the context. Capital paired with support.
The financing provision is critical. Founders need more than
mentorship. They need resources. This bill provides both.
What's at stake? Community isn't transactional, it's
transformational. When you love your community like family, you
don't just write a check and walk away. You build systems that
last. The SPARK Act is about building those systems nationwide
so that every community has access to the infrastructure that
makes entrepreneurs possible. Not as the privilege, as a path
forward.
We've seen what happens when you invest in people and
institutions the right way. Businesses grow, jobs are created,
wealth stays local instead of extracting out. The SPARK Act
would make that possible at a scale we can't achieve alone.
Thank you.
[The prepared statement of Ms. Holiday follows.]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Markey. Beautiful. Thank you so much for your
testimony. If I may, I'd just like to ask a couple of
questions. First of all, why did you and Jaylen just focus on
entrepreneurship? Why is that, from your perspective, the key
that you have decided to put the spotlight on?
Ms. Brown. Well, with being in the community Jaylen saw
that same article that you spoke about earlier and wanted to
give people, like I said, just not jobs, but the ability to own
or to create their own. So, with that being said,
entrepreneurship was what we talked about and how that would be
successful, for if they had, you know, continued resources and
funding to be able to create their own opportunity.
Senator Markey. Yes. Lauren, what drew you to this one
issue, you, and Jrue?
Ms. Holiday. It actually started during the pandemic when
the guys were going to the NBA bubble, and I was pregnant with
our son. And during the time, like George Floyd had just
happened, all of these things just happened, and my husband was
having a hard time figuring out why, or like what mattered, to
go back to the bubble to play basketball when there was such a
divide in our country of racial divide.
And we were brainstorming and I asked him what would make
it worth it, and not going to the bubble, maybe would've made a
stand, but it wouldn't have made an impact that we wanted. And
so, he decided to donate the rest of his salary for that year,
$5.3 million to support black-owned businesses and black-owned
nonprofits, black and brown owned. And so that is really what
inspired us. It was just seeing the need during a pandemic,
during a time of social unrest that the black community was
disproportionately affected.
Senator Markey. Yep. Beautiful. And do you have a story or
two that each of you might want to bring to this issue that
kind of sticks out in your mind? Someone you met, some
opportunity that you really thought should be able to get help,
but was denied that help? Do you have an example, Mechalle?
Ms. Brown. Well, I have two, but Lauren talked about Little
Cocoa Bean, which was one of them, I spoke at when they opened
at the Children's Museum, but also the Sneaker launch, which
was Sydney's project. And we just saw that once that was there
with the support that, how it spiked his sales and able to help
him gather what he needed, like being able to be a part of the
cohort. And learn and grow what we saw what that was doing, and
wanted to continue to be able to do that.
Senator Markey. Thank you. Lauren, do you have a story?
Ms. Holiday. Yeah, I feel like we have so many stories. One
that really sticks out to me. I told you about Tracy from
Little Cocoa Bean, but a story from Milwaukee, actually. There
was a woman that was teaching yoga in inner city schools to
make sure that the kids had proper mechanisms to cope with the
traumas that were around them and what was happening. And she
was trying to open her own studio.
And through our JLH they were able to crowdfund almost or
over $100,000, and she has been thriving ever since. And I feel
like these stories just continue to happen. Like once the
investment is there, they're able to thrive.
Senator Markey. Oh, excellent. So, what's the one message
if you're going to sum up what your message is, what Jaylen's
message is, you Lauren, what you and Jrue, what is your message
to the community? What is your message to Washington in terms
of what you think has to happen to unlock all this potential
Mechalle?
Ms. Brown. Sure. I believe that our vision, like you said,
to unlock the potential for Boston Xchange would be to help
rebuild what was stripped away. And this would be able to
nurture a local economy rooted in innovation, inclusion,
culture, and care. So, I think with that being the message that
we need, the resources regarding to build up the communities
again, that they were there at one time or not really, but we
want to build those up. So that, I think would be our message,
is to be able to come together and nurture the local economy.
Senator Markey. Okay. Thank you. Lauren, what's your,
message?
Ms. Holiday. I think the message that my husband and I
always say is, ``cause creates community, but contribution
creates belonging.'' And in our communities, we need to
contribute so that everyone feels like they belong. And I can
use Boston as an example. Us going to Boston and being able to
contribute, we still feel like Boston is home. We have created
a family with Jaylen Brown, with Miss Mechalle.
We have been able to create a family with our Boston
Xchange cohort. And that isn't possible if we didn't actually
contribute to that. And so, I would say cause creates
community, but contribution creates belonging. It is our job to
contribute to our communities.
Senator Markey. Yes. Well, that's what you're doing. These
two families have given us a vision for what is possible, for
how we have to focus on the issue, but then work across all
segments of the community in order to ensure that we see the
progress, which we know can happen, right? It's just a
stultification of human potential.
And unfortunately, once again, president Trump over the
weekend in his insulting comments about Barack and Michelle
Obama, have demonstrate how hard we have to work in over to
overcome that historic bigotry which has led to this denial of
access to the financial capital that unlocks human capital in
the black and brown communities in our country.
So just this hearing is actually could not be on a better
day than after what we just saw this weekend. It just says we
have to work a lot harder and we have to win this year so that
then we can pass the SPARK Act and have that funding be made
available.
So, we can't thank you enough for all of the work, which
the two of you have done. And maybe we could all just give a
warm round of thanks to Mechalle and Lauren. Thank you for all
of your great work. Thank you so much, and thank you for being
here.
Ms. Brown. Thank you.
Ms. Holiday. Thank you.
Senator Markey. Now we're going to move to our second panel
and we can we can hear from them and their comments reinforcing
what Ms. Brown and Mrs. Holiday have already laid out for us.
While we're waiting for that, I see actually Gladys Vega is
here. Gladys Vega is the CEO of La Colaborativa, which is in
Chelsea, but it just serves so many other communities in the
greater Boston area. And she is here as just an incredible
leader, incredible spokesperson for all of those in need,
including entrepreneurs to get access to the Capitol, which
they need.
And we're also joined by counselor Miniard Culpepper, who
has joined us as well. We thank you for joining us today. And
would you like to say a word before?
Mr. Culpepper. It's amazing. I didn't think he was going to
give me the mic, but I thank Senator Markey for giving me two
minutes. Senator Markey and I go way back when Ted Kennedy ran
for president. That's when I first met Senator Markey. Some of
you weren't even born.
And so, we've been working in the trenches. Remember, he
was at the State House, and he went to Congress, and now he's a
Senator. And the good news is that we've done some good things
together. This is a great hearing because I think it connects
with some, I just got off a conference call and what we talked
about for city council next week, Senator, is we're having
Black History Month.
And the thing for Black History Month that the city council
has laid out is economic empowerment for our community. And so,
Senator Markey is always on the right side of issues. When he's
not you can always give him a call, but he stands with us and
for us.
When I was running this summer, you know who I called, Ed
Markey. And let me tell you what he did. Yep. He did something.
He walked up Nazing Street. That was the first time a United
States Senator had ever walked up Nazing Street in Roxbury in
the history of this Commonwealth. And he knocked on doors and
talked to folks. That's the kind of Senator he is. He goes into
the neighborhoods where you'll never find a Senator.
So, I just want to thank you for inviting me to be with you
today. And just give me a call. Just call my name. I'll be
there. Thank you, Senator Markey.
[Applause.]
Senator Markey. Great. Thank you. And again, the SPARK Act,
it's a big bill. It's $500,000 per year per organization for
five years in a row, guaranteed. And so, it's a lot of money
per organization. And then you seed it in community after
community across the country then you can see the difference
which it would make.
So now I'm excited to introduce our second panel of
witnesses. Ms. Renee King is the CEO We Are The Funders. Ms.
King works with Boston Xchange and JLH social Impact Fund to
support minority entrepreneurs in Boston. Her work focuses on
providing funding and other long-term support for black-owned
businesses. So, welcome, Renee, whenever you're comfortable,
please begin. So, whenever you're ready Ms. Renee King please
begin. Thank you. Can you move the microphone in a little bit
closer?
Ms. King. How's that?
Senator Markey. Good. Beautiful.
STATEMENT OF MS. RENEE KING, CEO, WE ARE THE FUNDERS, NEW YORK
Ms. King. Okay. So, Senator Markey and team, thank you for
the opportunity to testify. Good afternoon, everyone.
So, my name is Renee King. And for the last several years
I've worked alongside founders, institutions, community leaders
supporting entrepreneurs who are building businesses because
they had innovative ideas and they also had to. And the
solutions they needed to support them didn't exist around to
help them get to the final stage of where they're going.
And now, also, I'll echo the statement that jobs also don't
exist too. So, a lot of these entrepreneurs, the future of work
is entrepreneurship. That's the reality that we are in right
now in this economy. And when we see traditional employment
disappearing, entire industry is restructuring, and millions of
like Americans in our communities they're taking this leap into
business ownership. Not only because, you know, they have an
idea, but also out of necessity.
We have a problem if we're asking them to jump in without a
net, right? We have a huge problem at hand. And the problem is
that we're leaving entire communities without the
infrastructure to turn survival into sustainability, without
the mentorship, the networks, the capital, the coordination
that makes businesses succeed instead of fail.
And that result isn't just the inequity that we see in
reducing the rate, this view in causing this huge racial wealth
gap that we do see. But it's also economic loss for all of us,
right? We are literally leaving tons of money on the table.
We're leaving money on the table, talent on the sidelines, and
capacity untapped.
Senator Markey SPARK Act is about stopping that loss. It
invests directly on the ground ecosystem builders, the place-
based community informed institutions that already know how to
mobilize our communities into ownership, like guide them into
entrepreneurship success.
These are the institutions that can scale support at the
speed at the current moment right now demands and it pairs that
ecosystem support with capital, with funding, because as ready
as you are to be able to jump into becoming an entrepreneur,
readiness without funding is just another barrier.
We can't afford to leave entire communities unresourced
while the economy restructures around them. That's what I want
to talk you through today. Over the last several years, I've
had the opportunity to work with athlete led platforms like
Jrue and Lauren Holiday, Social Impact Fund, community
development institutions, corporate partners to support
founders in not just Boston, but New Orleans, Kentucky, LA and
so many cities beyond.
And what we've learned in that work is this: entrepreneurs
do not fail because they lack the talent and the ideas, they
fail because the systems around them are not connected. Too
often the support is short term. The programs end just as the
entrepreneur is experiencing momentum. Momentum builds, and the
institutions that are here that are doing great work, sometimes
we're doing this great work, but we're operating in silos and
the capital arrives too late, or the support arrives too late
or not at all for these entrepreneurs.
So, the gap between this readiness and access is where our
businesses are dying. But when you resource to institutions
that are rooted in community and culture, institutions that
understand local context, that build long-term relationships
with the businesses in the community that coordinate across
sectors, entrepreneurs truly succeed.
They don't just survive, they succeed. They raise capital,
they hire, they scale, and the wealth they create, it stays in
the community, right? And that's what ecosystem building looks
like when it's done right.
The SPARK Act matters because it reflects what actually
works, which I love that. Like it's taken in a lot of input and
insights from folks who are doing great work already. It
recognizes that ecosystems are not short-term pilots. They
require time, trust, and multi-year commitment. It prioritizes
collaboration between accelerators, lenders, educational
institutions, government, philanthropy, conscious consumers,
and local partners.
Like, it pulls all this together and that mirrors how
successful ecosystems actually function. And critically, it
acknowledges that ecosystem support must be paired with capital
funding. That's mission critical.
I want to specifically lift up the financing provision in
the bill. From experience I've been ready to start a business.
I've started multiple businesses and didn't have the capital
and the funding stays, and then everything stalls and
everything goes out the door. And without capital or funding,
that's what happens. You stall the economic growth of a
business that can totally grow and survive.
Founders can complete every program. They can build the
plan, they can get investment ready and still hit a wall
because they do not have funding, they don't have collateral,
they don't have credit history, they don't have the right
relationships, right? To give them the capital to fuel them to
the next milestone, to the next step.
And that gap, yes, it is causing the racial wealth gap, but
it's also causing a huge economic gap in just our U.S. economy
period. So, the financing provision in the SPARK Act addresses
this by pairing grants and also lower cost loans with trusted
ecosystem operators who can get it out to these businesses and
get them the fuel they need.
This is really important because it treats capital as being
catalytic. It unlocks momentum, it covers the gap between idea
and traction. And this is what's needed. This is what our
entrepreneurs need to be able to sustain. And the success of
this provision will depend on thoughtful implementation.
But its inclusion materially strengthens the bill by
addressing a barrier entrepreneurs face every single day. So, I
want to be really, really clear of what's at stake. The economy
is restructuring automation. You have AI, you have industry
consolidation, you have traditional employment pathways are
disappearing faster than we're creating new ones.
Entrepreneurship is not only like just for those who have
innovative ideas. It's not only a side option anymore. It's
going to be how many of us are going to survive. That's it.
Entrepreneurship is going to be the future. And we're not
ready. We don't have the support systems ready to support the
amount of entrepreneurs that are here right now, and that want
the entrepreneurs to come. We're asking entire communities to
build without the infrastructure to succeed.
So, the SPARK Act doesn't attempt to impose like a top-down
solution and invest in the institutions that already know how
to do this work. And it scales what is already working. This
isn't as aspirational; this is economically necessary.
If we want an economy that actually works, that doesn't
leave entire demographics on the sidelines while industries
restructure around them, we have to resource, the institutions
that can mobilize all communities into ownership, not just some
communities. We are leaving too much money on the table with
the current way that we're doing this work.
The SPARK Act is about stopping that loss and building the
infrastructure this moment demands. And I'm really grateful to
have the opportunity to testify and to support this and endorse
this act. And I love the work that you all have done, and thank
you.
[The prepared statement of Ms. King follows.]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
[Applause.]
Senator Markey. Thank you, Renee, and great work. And thank
you for your help in putting this together today, Renee.
Absolutely indispensable. And I'm just going to lay out for you
what the vision is in the SPARK Act because not just Renee, but
the other witnesses are now going to go into the sub details of
how then all of this would work.
And so, the SPARK Act will create two programs, the SPARK
Program, and the SPARK Financing Program. Eligible
organizations, which may include non-profits, community
development finance institutions, CDFIs, which we will hear
from, minority depository institutions, lenders, participating
in small business administration programs, HBCUs, MSIs, and
community colleges can apply for both or one of these two
programs.
The SPARK program, let me go through that first. The SPARK
program eligible organizations can apply to receive a minimum
of $500,000 annually for an initial term of five years. So,
it's a minimum of $2.5 million over five years to establish or
expand accelerator or incubator services for underserved small
businesses.
And this funding would be used for administrative,
staffing, and other infrastructure needs associated with
funding accelerator are incubator programs. The second program,
the SPARK Financing Program. Eligible organizations can apply
to receive either one up to $1 million annually if they also
receive funding under the SPARK Program and up to $500,000
annually if they don't receive funding under the SPARK program.
This funding would be used to provide financing directly to
underserved small businesses. Organizations that receive this
funding can either provide grants of up to $20,000 are
subsidized loans directly to underserved small businesses. So
that's kind of the core idea that it's institutionalized. It's
there. We have professional organizations and then we have the
businesses that know where they can go to in the community in
order to get the funding which they would need.
So that's the concept which I've built into the
legislation, and I think it fits exactly what Boston is already
trying to unleash.
So, we're next going to hear from Keith Mahoney, who is the
Vice President for Communications and Public Affairs at the
Boston Foundation, one of the nation's first and most impactful
community foundations that aims to advance economic justice and
equity in Massachusetts. And Mr. Mahoney manages the
foundation's research and public policy initiatives. Welcome.
STATEMENT OF MR. KEITH MAHONEY, VICE PRESIDENT FOR
COMMUNICATIONS AND PUBLIC AFFAIRS, THE BOSTON FOUNDATION,
BOSTON, MASSACHUSETTS
Mr. Mahoney. Thank you, Senator Markey for convening this
field hearing and for your longstanding leadership on economic
justice and opportunity. We're especially grateful for your
work on the SPARK Act, which will make a real difference for
thousands of Massachusetts small businesses.
As you said, my name is Keith Mahoney. I'm a vice president
at the Boston Foundation, 111-year-old public charity with a
simple but enduring mission: to improve lives and strengthen
communities.
Philanthropy can often take risks and make investments that
government is unable or unwilling to do. Hopefully, the work we
have done here in Boston will demonstrate the wisdom behind the
SPARK Act.
In 2020, as COVID laid bare deep racial inequities, and as
the country reckoned with the murder of George Floyd, some hard
data cut through the noise. A U.S. Department of Commerce
report showed that businesses owned by people of color were
denied loans at twice the rate of white owned businesses.
And when loans were approved, the interest rates were on
average 22 percent higher. These disparities weren't new. But
seeing them documented so clearly prompted many financial
institutions to make public comments to support businesses of
color. Too many of those commitments did not last.
As political climates change too often, resolve changes
with them, and that's a problem because the small business
community in Massachusetts is becoming more diverse every year.
New businesses are far more likely to be black owned, Latino-
owned, or woman owned than older ones. If we are serious about
growing our economy, we cannot afford to ignore that reality.
For community foundations like ours, that is precisely when
the responsibility becomes clearest. At the Boston Foundation,
we believe that equity work must be durable, not fashionable.
That belief is why we launched the Business Equity Fund in
2018, well before the 2020 National Reckoning.
The goal of the fund is straightforward: to help establish
businesses of color, grow, create jobs, build we wealth and
strengthen their communities. The fund provides patient
flexible, low-cost capital to businesses that are already
performing, but are too often locked out of traditional
financing.
Here's what that's looked like so far. 7 businesses have
received 2.3 million in loans. The fund has attracted nearly 6
million in additional investment, bringing total capitalization
to 8.8 million. Early leadership funding came from Eastern
Bank, alongside significant support from the foundation. And
the Business Equity Fund doesn't operate in isolation. It's
part of a broader ecosystem that recognizes simple truth.
Capital alone is not enough.
That ecosystem includes the Business Equity Initiative,
which provides grants to organizations offering technical
assistance, professional networks, and industry specific
expertise. And the Greater Boston Chamber of Commerce
Pacesetters initiative, which encourages major employers to
direct more procurement dollars to businesses of color. It's
this coordination, capital, technical assistance, and market
access that makes the work effective and scalable.
At a moment when we talk rightly about trillions of dollars
in national investment, the Business Equity fund offers a
lesson in how smaller targeted interventions can deliver
outsized returns when they are trusted, locally rooted, and
built for the long haul.
Let me give you one example. OutKast Electrical
Contractors, a growing black-owned firm based in Dorchester was
at a crossroads in 2024. The company employed 60 local union
workers when its financial partners abruptly closed its line of
credit, leaving bankruptcy as the only apparent option. LEAF,
the Local Enterprise Assistance Fund, and a Boston Foundation
grantee stepped in, helping OutKast navigate out of bankruptcy,
stabilize operations, and build a more secure future. This is
only one story among many. innovative companies in overlooked
communities that can now not only survive, but grow and thrive.
Senator Markey, if we're serious about closing the racial
wealth gap and strengthening the Commonwealth's economy from
the ground up, we must invest in models that endure political
shifts, center lived experience, treat equity as a permanent
commitment, not a temporary response.
That's why we're so excited about the SPARK Act. It
reflects common sense policy that extends a lifeline to small
businesses and strengthens our economy. Patient equitable
capital can work. We have shown that locally the SPARK Act will
bring that to scale. The Boston Foundation stands ready to
continue this work and to partner with leaders who understand
that economic justice is not optional infrastructure. It's
essential. Thank you.
[The prepared statement of Mr. Mahoney follows.]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Markey. Okay. Thank you, Mr. Mahoney. We're going
to hear from Nicole Obi. Nicole is the President of the Black
Economic Council of Massachusetts. BECMA is a nonprofit
organization that builds black wealth across Massachusetts by
supporting and empowering businesses and removing barriers to
opportunity and prosperity for the community.
Ms. Obi is an entrepreneur and serves on the Governor's
Advisory Council on Black Empowerment. Congresswoman Presley
and I and Senator--we were able to give $1 million to BECMA a
couple years ago to help with their structure. We were able to
add $700,000 this year to further augment that work, which you
do inside of the community. Your organization's kind of a
beacon for plaque entrepreneurship, and we thank you so much.
So, whenever you're comfortable, please begin.
STATEMENT OF MS. NICOLE OBI, PRESIDENT, BLACK ECONOMIC COUNCIL
OF MASSACHUSETTS, ROXBURY CROSSING, MASSACHUSETTS
Ms. Obi. Thank you, Ranking Member Markey, and thank you
for the opportunity to testify today. And thank you for your
leadership on behalf of America's Small Businesses.
BECMA, we are a statewide member-based nonprofit focused on
closing the racial wealth gap by helping black-owned
businesses, 700 to date in the last four years. We help them to
start, grow, and scale, and by strengthening the economic
ecosystem that supports them.
And I appreciate the committee's focus on uplifting
minority entrepreneurs, because as we've heard, the challenges
they face today are not abstract. They're structural,
compounding, and increasingly shaped by Federal policy
decisions.
Black and minority entrepreneurs are more likely to start
businesses, yet less likely to access adequate, affordable
capital, professional support, or growth stage opportunities.
Even the profitable firms are denied financing at higher rates.
And when support does exist, it's often short term, fragmented
or disconnected from the places where entrepreneurs actually
operate.
At the same time, these longstanding barriers are colliding
with new pressures. Tariffs and supply chain disruptions have
raised the cost of goods and materials, and inclusive
procurement pathways are narrowing as agencies and private and
public companies pull back amid legal and political
uncertainty. Immigration enforcement actions, even when not
directed at a specific business, are destabilizing local label
markets and reducing foot traffic in entire neighborhoods. So,
fear alone has economic consequences.
For black owned businesses, which are more likely to
operate with thinner margins and less access to flexible
capital, these pressures don't just slow growth. They force
businesses to freeze hiring, reduce hours, delay expansion, or
exit the market altogether. And this is not anecdotal. It's a
predictable pattern we are seeing playing out across many
sectors, and that's why the SPARK Act is so important and why
its timing matters.
What distinguishes Senator Markey's SPARK Act is that it
does not treat entrepreneurs as isolated actors who simply need
more advice or resilience. It recognizes that successful
businesses grow with strong local ecosystems, and that those
ecosystems require sustained investment. The SPARK Act invests
in incubators, accelerators, and community-based lenders that
provide trust, on the ground support in underserved
communities.
And just as importantly, it pairs technical assistance with
flexible financing, that helps to reduce collateral barriers
and steers entrepreneurs away from predatory alternatives, and
this combination is critical. From our experience at BECMA,
this integrated approach is what actually changes outcomes.
When entrepreneurs receive coordinated support, business
advice, access to capital and pathways into procurement and job
creation, businesses last longer, they hire locally and create
wealth that circulates within their communities.
So, the SPARK Act also gets accountability right. By
requiring reporting on capital access, job creation, wages, and
participation by race and geography. It ensures that public
dollars are tied to real economic outcomes, not just activity.
And at a moment when data transparency is eroding, this
commitment matters.
In Massachusetts, we've seen how fragile progress becomes
when ecosystem funding is short term or disconnected from local
realities. The SPARK Act offers a durable national framework
that scales what works, while allowing communities to tailor
solutions to their unique challenges.
Senator Markey's leadership on this legislation sends a
clear message: Minority entrepreneurs are not a niche concern.
They are central to America's economic resilience. And when
black and other underserved entrepreneurs succeed, families
stabilize, wealth is created and regional economies grow
stronger.
So, on behalf of BECMA and the entrepreneurs, we have one
here, in the communities we represent, I urge this committee to
advance the SPARK Act and continue investing in policies that
make entrepreneurship a viable pathway to stability growth, and
wealth building. Thank you.
[The prepared statement of Ms. Obi follows.]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Markey. Thank you so much. Beautiful. And now,
we're going to hear--and this is a key piece of testimony here
because Karim Hill represents people who are already doing it
right now. He's the president of BDC Community Capital, which
is a Community Development Financial Institution, or CDFI, an
SBA Community Advantage lender, and an affiliate of the New
England Certified Development Corporation, a leading SBA 504
lender in Massachusetts.
And Mr. Hill has extensive experience as a lender and was
president and the CEO of the New England Business Association.
So, we welcome you and whenever you feel comfortable, please
begin.
STATEMENT OF MR. KARIM HILL, PRESIDENT, BDC COMMUNITY CAPITAL
CORPORATION, WAKEFIELD, MASSACHUSETTS
Mr. Hill. Thank you, Ranking Member Markey. And I want to
thank you for all the work you have continued to do. And one
thing I'll say about the Ranking Member is six years ago when I
was running the New England Business Association, you did an
interview with me before you actually went for this new term.
So, I really appreciate the fact that you are always
accessible and you find a way to get down to the brass tacks of
helping small business owners. So, thank you for all the work
you have continued to do, and thank you for inviting me back to
speak for this testimony today.
Again, as the Senator said, I'm Karim Hill. I'm the
President of BDC Community Capital, and I'm the inaugural
president. What that means is we actually started this program.
I started this program in 2021. I was fortunate enough to get
an investment from BDC Capital, which is the larger
organization of half a million dollars in equity, and a line of
credit of $5 million to lend out to minority business owners.
Once I received that, my job was to then go and find a way
to make us U.S. Treasury certified, which is not an easy thing
to do, right? It took us almost two years to go through all the
steps to be U.S. Treasury certified. And then once we
accomplished that in 2022, we started making our first loans.
Now, as I said, we had a $5 million line of credit. I had
my own separate board. We're a 501(c)(3), and within the first
year, we exhausted that $5 million line of credit. So now I had
to go back to the banks and ask for more money, which we all
know is not fun, right?
But as a former banker, I knew the words to say, I knew how
to approach them, and we're able to secure a larger line of
credit. Today, since 2022, we've made 185 loans and lent out
more than $25 million to minority based small businesses
throughout the New England region.
Now, the proudest piece of that is 92 percent of those
loans have fit our target market. What's our target market?
Every CDFI has to have a designated target market. Ours are
African American small businesses, Hispanic-owned small
businesses, and any small business in a low to moderate income
area.
Ninety-two percent of our $25 million has gone to an entity
in those target markets. And that's really why we're here.
We're here to make sure that access to capital gets down to
where it needs to be.
So, we at BDC Community Capital, we fully support the SPARK
Act. And I want to read this appropriately because it deserves
to be read. The reason we support the SPARK Act is because it
allows the expansion of our personal efforts to underserved
entrepreneurs. And it focuses on spurring economic growth to
underserved communities. It encourages collaboration between
the SBA and organizations that serve low to moderate income
areas in minority and rural communities.
This is critical to supporting the local entrepreneurial
ecosystem. Fostering and using the rails that already exist is
critical. To get something what happens in a lot of areas and
Boston's no different. We have well hearted people, people that
have great ideas, great energy, they create something. But when
you're not using the rails that already exist, it's hard for it
to sustain.
Senator, I'm so proud that you're doing this the way you're
doing it, because you're using the SBA, which already exists,
that's important. And you're also using the SBA 504 program,
which is critical. For those who don't understand what the SBA
504 program is, it is vital to reducing the racial wealth gap.
And here's why.
The 504 is a primary lender, lends out a bank or credit
union lends out 50 percent loan to value on that project. The
40 percent is done by a CDC or ACDFI. Like us, we come in and
do the 40 percent that leaves a 10 percent equity slug that the
small business owner must provide.
We have gone out and created our own SBA 504 down payment
program where we will give you up to $100,000 to fulfill that
10 percent equity piece. That is critical. It's critical
because it takes a small business owner who is currently
running his or her business very, very well, and allows them to
truly build, close the racial wealth gap by owning their
building.
That sustainability is key to minority business owners. We
started this two years ago. I got the blessing of my board to
do it. We had no grant funding to do it. My board just allowed
us to go out and do this. We've now made 11 loans for just over
$1.1 million.
And the best part about it, not a single default, no
issues. It's testing and proving the fact that these small
business owners know how to run their businesses, and they just
need a little bit of more support to move forward. This is a
critical component, and this SPARK program will allow us to
enhance that with the funds you were talking about, Senator.
So, we are fully behind you on what you're trying to
accomplish. And we're out in front trying to bring access to
capital to those who truly need it.
Lastly, I want to make sure that everyone understands that
this work cannot be done without my peers here. The work that
these wonderful people do, they prepare small businesses for
us, meaning my group, to actually provide the funding. What
happens a lot is we will teach people what to do, but if you
can't secure that funding, that knowledge is not going to get
you where you need it to be.
Other CDFIs like myself, we are here and committed to
making sure we get those funds to where they need to be.
Senator, we fully support the efforts you're doing with the
Spark program. I'm honored to be here and can't wait to answer
any questions you may have.
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Senator Markey. No, thank you. Great question. Great
testimony. And again, this question of access to capital is
throughout the entire system. So, the state of Massachusetts
decided three years ago to make community college free.
So, you've got kids who come from the kind of communities
that I came from when I went to Boston College, it was
affordable. You could earn the tuition working during the
summer. You could take out a small amount of student loans in
order to do it. To go to Boston College or Boston University to
go to any of these schools, now it's $90,000 a year. Who has
that kind of money in the same streets that kids used to be
able to say, I can earn that funding.
So free community college has meant here in Roxbury
Community College, there's now more students here than there
were before the pandemic, because they don't have to think
about access to capital for their educational opportunities.
And there's been a dramatic rise in those students all across
the entire community college system, the entry level.
And so that's again, a smart business plan for
Massachusetts, which should be replicated across the whole
country. You know, we're not just the Bay State, we're the
brain state too. We're looking ahead, thinking about the issues
that everyone should have to deal with from an economic
perspective. And that's what the SPARK Act is intended to deal
with that issue when it comes to small businesses, to
entrepreneurs graduating from the school.
The data though, Mr. Mahoney, let's lay out, if you can
quickly. What's the data that you developed in terms of the
racial wealth gap that has locked minority members out of that
entrepreneurial world that then creates generational wealth?
Mr. Mahoney. So, I think there are a few different data
points. Senator, you mentioned earlier the 2015 Color of Wealth
study. And that is going to be redone this year. The Federal
Reserve Bank of Boston with the Boston Foundation, Bar
Foundation, Eastern Bank Foundation, and Greater Boston Chamber
of Commerce are supporting that study.
And that is you know, going to look at economic conditions
across the state. You know, the number may be different than
the one that was burned into the brains of most Bostonians 10
years ago. But it will show that gap continues.
The other data point that I think is important is around
the major legislation that passed earlier this year. The so-
called Big Beautiful Bill Act, which is not only going to
increase the deficit, but it's doing so by extending tax cuts
to favor the wealthy and scaling back the social safety net,
increasing border and security and defense funding.
The analysis from experts across the ideological spectrum,
including the CBO, the Yale Budget Lab, Urban Institute,
Brookings, all reached the same conclusion. The law will tilt
heavily towards the highest income households.
According to the CBO families in the bottom 10 percent of
the income gap lose about $120,000 a year, while those in the
top percent gain roughly $13,600. So that is going to
exacerbate not close the racial wealth gap in the years to
come.
Senator Markey. And again, you're talking about access to
educational healthcare, food benefits for those families,
correct?
Mr. Mahoney. Correct. When families that can't afford it
are paying more for healthcare or paying more for housing, or
paying more for education to cover tax cuts for families that
quite frankly, can afford healthcare education and the like,
and housing, own homes already. That's where that comes in.
And the other, you know, home ownership is an important
aspect of this, because that is a root of what is wealth as
opposed to income. Income gaps may close as earnings change,
but wealth is what gets passed down from generations. And
wealth is what allows someone to start a small business, to
afford higher education. When you own your house and you can
put the equity in that to helping the next generation purchase
their house, that is what has created the wealth gap over time.
And that is a result of deliberate policies like redlining,
discrimination on home loans and zoning decisions that were
made over decades and decades.
Senator Markey. Yes, and my father drove a truck for the
Hood Note Company, and I'm sitting here as a United States
Senator, right? So that's what we have to provide for everyone.
Well, no matter how they want to use their God-given abilities
that they can kind of dream and become that.
But not if you're taking away funding, which is what the
big ugly bill did beginning last July. Then people don't have
the discretionary capital. They have to pay more in healthcare,
more for education, more for food, more for everything.
And then that extra 20, 50, 100 grand that they might have
put into a business, it's just not there, you know, because
they just have to try to survive. So, Ms. King, access to
opportunities and networks and capital are significant barriers
for underserved entrepreneurs looking to start and run their
businesses. How do organizations that you run provide an
approach in supporting entrepreneurs? And why is this approach
even more effective?
Ms. King. So, there was a lot of points, really great
points that everybody set on here.
Senator Markey. Can you move the microphone down just a
little?
Ms. King. Oh yes. There was a lot of great points that
everyone said on here. And I don't know, I'm going to quote the
African proverb where many of you probably have heard this,
where it's like, ``it takes a village to raise a child.'' Have
you heard that proverb?
It also takes a village to grow an entrepreneur, to grow a
business, right? And the village has to be connected, right?
And this is what you're seeing. Here is the village, right?
We're all the village.
So, when we've built entire systems, when you think around,
like, we kind of have like a pre-K to college system for like,
if you want to go to school, this is the flow. But like when it
comes to entrepreneurship, we don't really have that flow
completely put together and coordinated, right?
We have folks who are doing it in the village who are doing
different siloed approaches of it, but we don't have it
completely through it. So, when someone starts a business, we
tell them, go figure it out. Go find the resource, go piece the
support together, piece the guidance you need together, even
though we already have institutions right here who can
collaborate, who can work together to ping pong around folks.
And that's what we're saying what I love about the SPARK
Act starts to facilitate. Like, how do you make it even easier
for all of us in the village? We already talk to each other. We
already circulate and bounce entrepreneurs between each other
because we know each other and can text each other and be like,
hey, look at the Little Cocoa Bean, or look at this business.
But now imagine if that got strengthened to the point of
where it's like a pre-K to college system, right? It's like
strengthened and we have the resources that we need so that we
can build that even better, because as Karim said, like he
needs folks to be prepped before they get to him, right? And
also, the folks in that prep, they need capital and resourcing
right before they can get to him.
So, the gap is what happens with this gap. And they kind of
call this kind of like the valley of death, I think is one of
the things, you can look it up. In this gap, when we don't have
us, all talking together and all the whole entire village
activated, not just us, but also customers, government,
philanthropy, everybody activated around this one entrepreneur
and making sure she survives, she's successful to get where she
is.
So, I'm going to give you another example of that. It's
when you don't have that, then the entrepreneur fails. But what
it looks like when you do have that is that when an
entrepreneur comes, they have this product, it has demand
already. Then you have like, MIT helps them build their
technical capacity. Harvard preps him for investor
conversations. Suffolk chimes in with legal support. RCC has
done stuff with us too to support that entrepreneur.
And then you have Jrue and Lauren Holiday supporting them
with their networks and funding. And Jaylen Brown is creating
space and also pouring in his funding and opening up his
networks. And they don't just operate during this one specific
time, they're staying with them, right? They're part of the
family of like; we're going to stay with this entrepreneur to
get you through because maybe in about eight months you have a
problem that you didn't even know was coming. So here it comes.
Now you're in this problem. So, then MIT comes back in and
says, let me create this war room of all of our successful,
like entrepreneurs who've been through your problem. Like, let
them sit with you and get you through the problem.
Then you have a barrier in month eight, where it's like,
okay, well Jrue is like, let me make a call to like, can we
walk you in to get this partnership? This is what it looks
like, right? It looks like we all have to be all-hands-on-deck
for these businesses in our communities who need us, not just
as customers, but they need us to also be the opener for all
the next things that they need for them to survive.
And there were a couple data points that were like floated.
I think we talked a lot. One thing why it's really important
for the businesses in our communities to really thrive is
because they're the first ones to pour back into the community.
There's a lot of data that shows that. Especially as black
and brown business owners, when they reach and sell or get to
the point of where they're like on shelves or they're IPO-ing
or whatever it is, they're the first ones to turn back into an
angel investor and double down and invest in the next business.
They're the first ones to give to the different solutions
that need help on the ground in their community. So, if we
don't support them, then the community, that's another gap you
see of like the person who knows exactly what the community
needs can't come back and resource their community that they
love.
So, it's really important around that. One other data point
I wanted to add in, and I was trying to find this to pull it. I
think sometimes when we speak about this, and like we speak
about this as like our black businesses, our brown businesses,
they don't get access to capital, right? They don't get access
to all these resources. We gave you all that data.
The other side of it, for you to intentionally not give the
capital to black and brown businesses is wild. Because what
other data point to know is that black businesses, with that
little bit of resourcing that you give, they're shown to
produce more revenue than other businesses who are well
resourced. That's what the data shows.
There's been CFIs that we've spoken to where they'll tell
us, you know, who doesn't default on the loan? Black
businesses, and we're not giving them loans. Why? Like, you're
intentionally blocking the economy. You're intentionally saying
like, this is what you're doing.
So, this village, this is what we do. One of the things we
were very intentional with Jrue, Lauren and Jaylen was like, we
already knew there were folks right here in Boston
intentionally building from like governors, mayors, Nicole,
everybody was already building.
So, it wasn't for us to duplicate it, it was to come in and
say, well, where do we fit in? How do we like ping pong things
together and let's flow this together. And then like, now let's
also invite the community and the customers in too, so that we
have this beautiful wrapped around village, around the
entrepreneur. And that's when you're going to see more success.
Where we're like, hands on everybody. It's like you have to
treat them like family and we all have to be coordinated around
this. Because if wherever you want to live, you want to see it
thrive and grow, it depends on this, it depends on those
businesses who are creating innovations to live right in your
communities.
Senator Markey. Fabulous. Thank you. So, Nicole Obi, how do
you interact with organizations like Boston Xchange and BDC
Capital? What is the role that you play?
Ms. Obi. Our role is while we focus on black entrepreneurs,
and as I mentioned, we've touched 700 of them directly. We also
partner with other organizations that are also supporting small
businesses. I often say that not all small businesses are black
and brown, but almost all black and brown businesses are small.
And so, we partner, you know, it's the same challenges that
we often face. So, we partner with Latino, Asian and LGBT
communities as well. And we find that to be really important. I
would say that last year we did a study of our member base and
we found that 70 percent of the survey respondents said that we
were the only source of support that they received. And so, a
lot of times those are our earliest stage businesses or those
that just haven't gotten any support quite yet.
And so, they are sort of the tip of the spear, the top of
the funnel. And what we are really trying to do in partnership
with others, including the folks here, is move people through
different stage gates.
While we do provide grants, because that's a great way to
start, for those businesses that are trying to get through
those initial milestones, we too have offered loans and like
Karim and like Renee just said, we've done 10 loans for a total
of $850,000 and all of those loans are current or have been
repaid. Those are very safe bets. And that's what we are really
trying to make sure that traditional lenders understand.
A success to us is being able to spin those businesses out
to traditional lenders and other CDFIs. And so, we've been able
to accomplish that. Something else that we work on, and
especially in partnership with other. So, Karim sits on a board
that I chair for the state around procurement.
We know that grants are not going to sustain businesses
indefinitely, but they are a great start. But it's really
procurement that we think is an important next step in helping
our businesses get and sustain themselves. And what we've found
just in BECMA over the last few years, that it usually takes a
couple of deals for our businesses to be able to sustain
themselves at this new level. So, we really look to try to get
them to that third deal mark.
But in the meantime, there's more support that we get from
our partners, whether it's capital or professional services or
advice. And so, there's a lot of ways that we are connected to
each other. We happen to see a lot of the businesses maybe
earlier stage, but to us, success is being able to have them
advance and get support from others and having them take it to
the next level.
Senator Markey. Fabulous. And Mr. Hill, we're going to give
you the last word here. Bring it all together for us. 504
Community Advantage program. Everything that you see here in
terms of how it could all funnel into you out into the economy,
businesses opening.
Mr. Hill. Yes. So, a lot of acronyms when you talk about
the SBA, right? So, you've got 504, you've got community
advantage. So how, how do those programs fit into the ecosystem
of getting access to capital to minority owned businesses?
Well, I'll give you one from each category.
The Community Advantage program, the reason it's so
important is it allows a lender like me to make a loan to a
company that's under two years in existence. Very few banks, if
any, will do a loan for a business that's under two years in
existence. The only way they will do it is if you have an
exorbitantly high net worth because they're really not banking
on the business. They're banking on you, right?
So, if you don't have a high net worth and your business is
under two years in existence, there's really no place for you
to go for financing except to a lender that has a Community
Advantage tag.
Now, what would we do with the SPARK funds with that
community advantage? How does that help? We can take a SPARK
line of $1 million that Senator Markey was talking about and
leverage that five times. So, $1 million can turn into $5
million in lending. That goes out in Community Advantage. Why?
Because the SBA guarantees us 75 percent on every Community
Advantage loan.
So, it allows us to leverage those dollars in a way that
has true impact. So that's the first way on Community
Advantage. The SBA 504, as I said earlier, with our down
payment program, we can take a million dollars of SPARK funding
and leverage that five times when it comes to that.
So, it allows us then to go out and reach to put $5 million
out on the street, divide that by a hundred thousand. That's a
lot of loans you can do. That's a lot of loans that can be put
out to individuals who could not receive that. Here's the one
data point I'll give you on the 504 piece. Here's why it's
important. 504 money it's fixed. It's a fixed rate for 25
years.
If you run your business today, I can guarantee you one
thing, your rent will not be the same for 25 years. Can
guarantee that. If you do a 504 loan, your rent will be the
same for 25 years. That's how it allows that business owner to
grow. It allows them not only to have the asset, but it gives
them certainty on the expense side.
Certainty is critical when you're running your own
business. So that's how these programs, Senator Markey, can
really help and really drive this racial wealth gap that we
talk about so often.
Senator Markey. You're great. Thank you so much. Thanks to
this incredible panel. Can we just give them a warm thanks for
their incredible work.
[Applause.]
Senator Markey. We're at the center of kind of the economic
revolution right here. I was able to put in $4 million for
Roxbury Community College a couple of years ago, and they're
renovating the Dudley House, which is right next door, which is
going to become the Center for Economic and Social Justice.
And we were just able to put in $2 million into the Federal
budget for Roxbury Community College for internships to learn
and earn. So, we're seeding those programs right here at the
school, and with this expert panel, we can see that these
really, really smart, ambitious young people walking the curb,
looking in are all wanting to maximize their God-given
abilities. So that's what this is going to be all about.
This has been an incredible hearing today. I'm taking all
of this back to Washington. My goal is to build a more
equitable future for everyone to ensure that black and brown
communities are fully integrated into our economy.
For anyone who is watching or would like to submit
testimony, you have 14 days to submit testimony. It will be
included in the congressional record, okay. So that we will
have all of your testimony to help us to develop this program
in a way that beginning next January will begin to really
augment all of the funding that should be available for young,
black, and brown entrepreneurs in our country.
With that, thank you all for being here, and this hearing
is adjourned. Thank you.
[Whereupon, at 1:39 p.m., the hearing was adjourned.]
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