By Megan Sayles, AFRO Business Writer,
Report for America Corps Member,
Capital Impact Partners and CDC Small Business Finance, two established DC-based national nonprofit organizations, recently merged and joined forces with Ventures Lending Technologies to create Momentus Capital, an organization that provides a continuum of social, financial and knowledge for local leaders, businesses and community organizations to foster economic mobility and wealth creation.
Momentus Capital specifically seeks to support African American entrepreneurs and communities that continue to be excluded from mainstream financial services and the banking system.
“Ultimately, our vision is to create a diverse, mission-driven financial services company that empowers communities to create inclusive and equitable opportunities in their communities,” said Ellis Carr, President and CEO. management of Momentus Capital.
Each of the organizations under Momentus Capital, which has already invested more than $250 million in DC Overtime, will continue to operate as separate entities to serve their key markets, but they will pool resources and offer new products.
The Impower Loan, Momentus Capital’s alternative to the Small Business Administration (SBA) 504 loan, targets entrepreneurs who have been denied a commercial real estate loan and helps them build new businesses in low-to-moderate income communities . It also has no minimum credit score requirement.
With its Equitable Development Initiative, Housing Equity Accelerator Fellowship, and Growing Diverse Housing Developers program, Momentus Capital will provide training, mentorship, and funding pathways to Black and Brown developers, as well as a better access to affordable housing for the whole community.
“It’s critical that we provide opportunities to generate income and wealth in communities, and we think about that through small business and owning your building that you operate in as a small business,” said said Carr. “We also know that fundamentally a healthy community is defined by having safe, affordable housing that doesn’t take up an astronomical percentage of your income.”
Although Momentus Capital has a national presence, it takes a local, place-based approach to better reach small business owners, social entrepreneurs, equitable developers, and policy makers.
In Michigan, the organization has already begun piloting a new lending program, Activate Detroit. The loan product is credit-blind – using character-based ratings instead – and targets black small businesses.
The organization decided to launch the product after discovering that only 1% of African American entrepreneurs in Detroit, which is a predominantly black city, were eligible for SBA Community Advantage Loans due to poor FICO scores.
After refining the product, Momentus Capital plans to expand the Activate Loan nationwide, and DC will be one of the next markets to offer it.
This fall, Momentus Capital will also launch an Impact Investing group, which will provide equity investments and venture debt to minority-run businesses so they have the capital they need to grow their businesses.
“It’s about building new capacity so that we can really deliver and mobilize the right kind of capital in the community so that the residents of these communities can really achieve the dreams that they have for themselves,” said Carr.
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