New Fund Will Expand Access to Capital for Small Businesses Owned by Entrepreneurs of Color

Entrepreneur Backed Assets Fund to provide critical support to community-based microlenders, with an initial goal to purchase $50 million in loans

Washington, DC, Dec. 03, 2020 (GLOBE NEWSWIRE) -- The Aspen Institute and the Microfinance Impact Collaborative today announced the creation of the Entrepreneur Backed Assets (EBA) Fund, which will strengthen the capacity of community-based financial institutions to lend to small businesses in low-income communities and those owned by people of color. The fund, which will create a secondary market for loans originated by community-based microlenders, has been launched with initial grant funding from the Citi Foundation, the Bill & Melinda Gates Foundation, and the Robert Wood Johnson Foundation. Microsoft Corporation and Woodforest National Bank are making the first capital investments in the Fund. A total of $8.75M in founding commitments have been made to this innovative solution.

While small businesses of all kinds have been hurt by the pandemic, business owners of color have been more acutely affected. Between February and June of 2020, the rate of business closures among Latino and Asian business owners was twice that of white owners, and the closure rate of Black-owned firms was almost four times as high.

Community-based microlenders target their lending to businesses that are not served by banks. The six microlenders that comprise the Microfinance Impact Collaborative – Accion Serving Illinois and Indiana, Ascendus, Dreamspring, Justine PETERSEN, LiftFund and Accion Opportunity Fund – make 75% of their loans to business owners of color, and 61% to businesses owned by low- and moderate-income individuals. Recognizing unprecedented circumstances, these lenders have taken action to help by rescheduling and deferring loans and extending additional credit, among other measures. Many community-based lenders now face their own financial challenges as a consequence. EBA Fund will empower these crucial institutions by purchasing existing loans, providing capital for new lending. The Fund has already begun to purchase loans from the CDFIs; with the funding agreements now in place it is on pace to purchase 1,000 small business loans by February of 2021.

The Fund’s design emerged from ongoing work of the Microfinance Impact Collaborative, which is convened and supported by the Aspen Institute’s Business Ownership Initiative, to identify and implement strategies to scale microlending in the United States. The Fund builds on a strategy developed by Revolve Asset Management, a firm founded by former staff members of MIC member Accion Serving Illinois and Indiana. Revolve is serving as the fund manager. Support for the initial testing and design work that led to the creation of the EBA Fund was provided by the Ewing Marion Kauffman Foundation, JPMorgan Chase, and the Mastercard Center for Inclusive Growth.

“We know that Community Development Financial Institutions (CDFIs), and microlenders in particular are critical to getting capital to entrepreneurs of color. The challenges these lenders have historically faced in raising the right kinds of capital have only been exacerbated by the impact of the COVID pandemic. We spent two years designing the EBA Fund business model, so we were able move rapidly to launch and respond to the unique challenges of the pandemic,” said Joyce Klein, Director of the Aspen Institute’s Business Ownership Initiative and Chair of the EBA Fund board of directors.

The Citi Foundation is proud to have supported the launch of the EBA Fund and its work to unlock greater access to capital for small businesses owned by people of color and those in underserved communities,” said Brandee McHale, Head of Citi Community Investing and Development and President of the Citi Foundation. “Enabling CDFIs to expand their scale and reach to address evolving needs is an effective way to support communities disproportionately impacted by the pandemic, and help ensure an equitable recovery for populations at risk of being left behind.”

“The EBA Fund will help provide critical support, create opportunities, and expand access to capital for minority owned small businesses and small-businesses in low-income communities,” said Tahreem Kampton, Assistant Treasurer and Chief Investment Officer at Microsoft. “We're pleased to partner with the EBA Fund to help build a more diverse and equitable playing field and we look forward to the opportunities that this investment will help create." 

“Woodforest has a long-standing commitment to collaborate with organizations that bring innovation to CDFIs. The EBA Fund is an exceptional, and timely example of what we can accomplish together. This Fund will help ensure liquidity and capital is there for minority-owned businesses that have been hit the hardest during the pandemic,” said Jay Dreibelbis, President and CEO, Woodforest National Bank.

Of the loans purchased to date, 78% are to entrepreneurs of color, 38% to women entrepreneurs, and 78% to entrepreneurs in low-income communities. The Fund’s goal is to purchase $50M in loans from the six Microfinance Impact Collaborative members, and then to expand to purchase loans from other community-based lenders.

“The EBA Fund is truly innovative and could be transformational for microlenders nationwide,” states Robert F. Boyle, Founder and CEO of Justine PETERSEN, “It’s this very type of forward thinking and doing that will allow mission lenders to thrive.”

“To ensure access to capital for women, Latinx and Black business owners, we need to re-imagine how to best capitalize Community Development Financial Institutions.  The EBA Fund is an example of how we can collectively come together to re-imagine a new approach for our future and in so doing, address the triple challenges of liquidity, credit risk and sustainability during and after the pandemic,” said Paul Quintero, CEO of Ascendus.


The Aspen Institute is a global nonprofit organization committed to realizing a free, just, and equitable society. Founded in 1949, the Institute drives change through dialogue, leadership, and action to help solve the most important challenges facing the United States and the world.

Business Ownership Initiative

The Aspen Institute Business Ownership Initiative works to build understanding and strengthen the role of business ownership as an economic opportunity strategy. We work closely with micro- and small business practitioners and the institutions that invest in them around the US to build knowledge and strengthen practice by exploring innovation, conducting research, evaluating new ideas, and supporting leaders. The initiative houses EOP’s longstanding work to support the US microenterprise development industry. BOI also serves as a resource to donors and investors interested in microenterprise in the United States. BOI is an initiative of the Economic Opportunities Program.

The Microfinance Impact Collaborative is a program of the Aspen Institute Business Ownership Initiative works to inform, strengthen, and accelerate the efforts of US microenterprise finance organizations committed to significantly increasing the impact of their work. Comprised of six leading microlenders from across the United States, including Accion Serving Illinois & IndianaAscendus, DreamSpringJustine PETERSENLiftFund, and Accion Opportunity Fund, the collaborative provides participating organizations with a venue and mechanism for collective learning and action.

Revolve Asset Management leverages more than five decades of financial sector experience to design, build, and manage innovative financial solutions for CDFIs. Its efforts are motivated by a passion to generate affordable, transparent, and sustainable capital solutions for people of color, women, and low-income entrepreneurs.



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