S.Hrg.119-349

1[Senate Hearing 119-349]2[From the U.S. Government Publishing Office]34                                                      S. Hrg. 119-34956              FIELD HEARING: THE ROLE OF ENTREPRENEUR-7                   SHIP IN REDUCING THE WEALTH GAP8=======================================================================910                                HEARING1112                               BEFORE THE1314                      COMMITTEE ON SMALL BUSINESS15                          AND ENTREPRENEURSHIP1617                                 of the1819                          UNITED STATES SENATE2021                    ONE HUNDRED NINETEENTH CONGRESS2223                             SECOND SESSION2425                               __________2627                            FEBRUARY 9, 20262829                               __________3031      Printed for the use of the Committee on Small Business and32                            Entrepreneurship3334[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]3536        Available via the World Wide Web: http://www.govinfo.gov3738                           __________3940                 U.S. GOVERNMENT PUBLISHING OFFICE4163-358                   WASHINGTON : 202642=======================================================================4344            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP45                    ONE HUNDRED NINETEENTH CONGRESS4647                              ----------4849                        JONI ERNST, Iowa, Chair50            EDWARD J. MARKEY, Massachusetts, Ranking Member51JAMES E. RISCH, Idaho                MARIA CANTWELL, Washington52RAND PAUL, Kentucky                  JEANNE SHAHEEN, New Hampshire53TIM SCOTT, South Carolina            CORY A. BOOKER, New Jersey54TODD YOUNG, Indiana                  CHRISTOPHER A. COONS, Delaware55JOSH HAWLEY, Missouri                MAZIE K. HIRONO, Hawaii56TED BUDD, North Carolina             JACKY ROSEN, Nevada57JOHN R. CURTIS, Utah                 JOHN W. HICKENLOOPER, Colorado58JAMES C. JUSTICE, West Virginia      ADAM B. SCHIFF, California59JON HUSTED, Ohio60                Meredith West, Republican Staff Director61                 Sean Moore, Democratic Staff Director6263                           C O N T E N T S6465                              ----------6667                            FEBRUARY 9, 202668                           Opening Statements6970                                                                   Page71Edward J. Markey, U.S. Senator from Massachusetts................     17273                               Witnesses7475Ms. Mechalle Brown, President, 7uice Foundation, on Behalf of76  Jaylen Brown, Waltham, MA......................................     777    Prepared Statement...........................................     978Mrs. Lauren Holiday, Founder, JLH Social Impact Fund, Los79  Angeles, CA....................................................    1180    Prepared Statement...........................................    1381Mr. Jrue Holiday, Founder, JLH Social Impact Fund, Los Angeles,82  CA83    Prepared Statement...........................................    1684Ms. Renee King, CEO, We Are The Funders, New York, NY............    2185    Prepared Statement...........................................    2486Mr. Keith A. Mahoney, Vice President for Communications and87  Public Affairs, The Boston Foundation, Boston, MA..............    2788    Prepared Statement...........................................    3089Ms. Nicole Obi, President and CEO, Black Economic Council of90  Massachusetts, Roxbury Crossing, MA............................    3491    Prepared Statement...........................................    3692Mr. Karim Hill, President, BDC Community Capital Corporation,93  Wakefield, MA..................................................    3894    Prepared Statement...........................................    419596              Additional Letters/Statements for the Record9798Center for Entrepreneurial Opportunity--Statement Dated February99  9, 2026........................................................    49100101        THE ROLE OF ENTREPRENEURSHIP IN REDUCING THE WEALTH GAP102103                              ----------104105                        MONDAY, FEBRUARY 9, 2026106107                      United States Senate,108                        Committee on Small Business109                                      and Entrepreneurship,110                                                    Washington, DC.111    The committee met, pursuant to notice, at 12:05 p.m., in1121st Floor Student Commons, Building 3 Academic Building,113Roxbury Community College, 1234 Columbus Avenue, Roxbury,114Massachusetts 02120, Hon. Ed Markey, presiding.115    Present: Senator Markey [presiding].116117              OPENING STATEMENT OF SENATOR MARKEY118119    Senator Markey. Good afternoon, everyone, and thank you for120being here today. The Senate Committee on Small Business and121Entrepreneurship will come to order. We have a very important122hearing today. I want to first turn it to Lauretta Siggers-123Benton, the Chief Operating Officer for Roxbury Community124College for an introduction. Lauretta.125    Ms. Siggers-Benton. Thank you, Senator. Good afternoon,126Senator Markey and distinguished witnesses and guests. On127behalf of the President Jonathan Jefferson, Roxbury Community128College's Board of trustees, and our broader community, we want129to welcome you here to Roxbury Community College today. Thank130you for choosing RCC as the site for this important hearing on131such a critical role that entrepreneurship plays in the closing132racial wealth gap.133    My name as he mentioned, is Lauretta Siggers-Benton. I'm134the Chief Operating Officer here at the college. I'm also135serving as an interim role right now for advancement. So, we're136also raising money for our college, and I'm honored to137represent the college today to share just a few ways that138Roxbury Community College is supporting entrepreneurs across139our service area.140    Roxbury Community College is deeply committed to economic141mobility, equity, and opportunity. Two of our key initiatives142to do this through is through our Center for Economic and143Social Justice. We call that the CESJ, and the Business144Innovation Center, which is our BIC.145    These initiatives are at the forefront of our work. Today146we provide residents and students with the services, support,147and connections to capital necessary for long-term success.148Established in 2022, the Center for Economic and Social Justice149focuses on preparing students to secure employment and develop150their own small businesses and high growth industries such as151green technology and healthcare.152    The CESJ is also leading the implementation of Roxbury's153new Learn and Earn model, which will ensure that every student154has the opportunity to complete a paid credit bearing155internship before graduating here from Roxbury Community156College. This game changing approach removes the impossible157choice many students face between working and staying enrolled158here at the college.159    We're creating a clear and efficient pathway to economic160mobility. And I want to extend a special thank you to Senator161Markey for securing the CDS funding that allowed RCC to begin162transforming the historic David Dudley House into the future163home of the Center for Economic and Social Justice. So, can I164just give him a round of applause? It's because of him we165received that funding.166    We are continuing to raise funds for this capital project167and look forward to welcoming you back to the campus for the168groundbreaking when this is all complete. The Business169Innovation Center, or the BIC, as I referred to earlier,170supports aspiring entrepreneurs by providing practical171knowledge, mentorship, and access to resources.172    Since opening last year, we have served over 668173individuals, and they have utilized the center. And about,174approximately one third of that is our own students, and then175two thirds of that are people out in the community. And so,176we're excited again that we have branched this out, not just to177our students, but for those in the community as well.178    The BIC offers one-on-one mentorship, and introductory179business planning programs and informational sessions with key180partners to provide them access. And we provide, as I181mentioned, provide the access to physical space and technology182essential for success.183    To maximize the impact, the BIC has built strong184partnerships with organizations, including many, I'll just name185a few here just in essence of time. The U.S. Small Business186Administration, Lawyers for Civil Rights, we connected with187Suffolk University Seed Program, Boston Main Street, just to188name a few. And we continue to align ourselves with other189mission partners. This is what we've tried to do is continue to190align ourselves with other opportunities that are out there.191    Through the collaborations, the BIC has delivered a robust192series of business focus workshops and resources on a rolling193basis. So, this is happening now for both students and194community entrepreneurs, where we are opening our doors to195teach them how to own their own business through workshops.196    Roxbury Community College is also proud to serve the SPARK197Bill, which is fully aligned with the mission and work of the198BIC. Together, the CESJ and the BIC will play central roles in199implementing Roxbury's 2025 to 2030 strategic goals known as200Roxbury 2030. The plan positions the college to lead with201clarity, purpose, and impact, focusing transparency, belonging,202and institutional accountability.203    Grounded in the lived experiences of our students, the204expertise of our faculty and staff, and the insights of our205community and civic partners, the plan reflects both the206urgency and the promise of this moment.207    We look forward to continue collaboration with you, Senator208Markey, representative Presley, and many others that have been209there for Roxbury Community College, and every one of you in210the room as we implement this plan, measure our success and211expand opportunities for lasting economic mobility.212    Thank you again for your continued support in joining us213here today at Roxbury Community College.214    Senator Markey. Beautiful. Thank you, thank you so much.215And we're honored to be joined by leaders from the Boston City216Council, but we're also joined by a champion on Beacon Hill, a217fighter every day for economic equality, but breaking down the218barriers to entering into this economic system. And she is219joining us right now. Senator Liz Miranda, would you like to220say a few words?221    Ms. Miranda. Every time the Senator speaks, I feel like I222should put Reverend in front of his name. Do y'all get that223feeling as well? I'm happy to be here as the state senator, the224second Suffolk district. I see three of my city council225colleagues, I welcome you. And none of us can do this work226without the relationship that we have with both the Federal,227the State, and of local officials and the municipalities like228Roxbury.229    I'm not going to be long, but it's actually afternoon,230right? I haven't finished my Dunkin Donuts yet. But as someone231who's been born and raised and owns a home in Roxbury, it's232always an honor to welcome you as partners and as leaders into233this community, especially those who just don't talk about it.234But folks that actually live and work toward equity every day,235but they show up and they do the work alongside us.236    Today, I'm proud to welcome my colleagues and my friend Ed237Markey, back to Roxbury for the Senate Small Business Committee238field hearing on the role of entrepreneurship in reducing the239racial wealth gap. I know something about that as a former240entrepreneur, and I guess you're always an entrepreneur, right?241Once you start a business, regardless if you close it, you242always be an entrepreneur.243    And Senator Markey, I just want to thank you. We've been on244this road to together supporting RCC and a lot of initiatives245for the last eight years that I've been in the legislature, and246you've always been present in our neighborhoods. You listen to247small businesses and our families, and you show up early and248you show up often, which I appreciate. And that consistency249really matters when you want that from your leadership.250    And it's important to ground ourselves in where we actually251are though. We're gathered in a building that exists because252the community fought back. More than 50 years ago, black253leaders joined hands with leaders all throughout many254communities and fought for eight lane highway to not exist in255our communities. And there would be no Roxbury Community256College if that group of people did not succeed.257    And because of them, not only are we here, but we're still258here, we're still rooted, and we're still building. We stand on259these shoulders of all of our ancestors today, and it's our260responsibility to fulfill the promises they actually fought261for. Not just as elected officials, but as people in community262as well.263    So here in Roxbury, we know that talent is everywhere, but264the opportunity is not. We have entrepreneurs, we have265innovators, small business owners, and dreamers on every block.266What they need is access to capital. They need contracts, and267they need actual, real investment.268    If we are serious about closing the racial wealth gap in269the Commonwealth of Massachusetts, that is actually widening270and the pay gender gap that is actually widening. If we're271serious about doing that, we have to be serious about272supporting minority- and women-owned businesses and creating273the pathways to ownership and generational wealth.274    I want to thank you because today is about solutions, and275I'm grateful you chose to hold it right here in my favorite276place in the city of Boston. Welcome back to Roxbury, Senator.277We are glad you're here, and we are ready to get to work with278you. Thank you.279    Senator Markey. Thank you, thank you Senator so much. And280we're joined by city councilor Enrique Pepen, who is sitting281right here in the front row, city councilor Sharon Durkan282sitting here in the front row, city counselor John Fitzgerald283sitting right here in the front row, all here, front and284center, trying to build this as a community issue. Would each285of you like to get up on one minute and say something at the286opening?287    Unidentified Speaker. Want to hear Senator, thank you.288    Senator Markey. So, thanks to everyone for joining us here289today. I'm honored to be holding this field hearing entitled,290``The Role of Entrepreneurship in Reducing the Racial Wealth291Gap,'' at RCC because of what this institution stands for,292affordable quality education for everyone. And this is without293question the key, because education and entrepreneurship go294together like peanut butter and jelly, it's just that you need295them both to make the sandwich work.296    And if we're going to deal with these gaps in racial297wealth, then it begins with this institution, along with all of298the access to capital, which then accompanies people leaving299here to go off into the world.300    Roxbury Community College's Center for Economic and Social301Justice and the New Business Innovation Center are breaking302down barriers on a daily basis. And these programs offer the303education, the skills, the mentorship opportunities to build304wealth through entrepreneurship.305    The Roxbury Community College has partnered with Jaylen306Brown, Jrue Holiday, Lauren Holiday, to launch and support the307Boston Creator Incubator and Accelerator. This collaboration308supports creators from underinvested communities with the309resources and the support which they need in order to thrive.310    Their work builds on and relies on the research network and311the capital that organizations like the Black Economic Council312of Massachusetts BECMA, BDC Capital Corporation, We Are The313Funders, and Boston Foundation provide. These witnesses are a314shining example of what can happen when a community comes315together, collaborates and centers community needs. That's what316this hearing is all about.317    It's about a whole of community approach bringing together318government, higher education, research institutions, investors,319and visionaries. It is only with a combination of these systems320and intentional programs and policies that we will harness321entrepreneurship of true potential to close the racial wealth322gap.323    For more than a decade, the Federal Reserve of Boston324reported that median net worth of Boston's black neighborhoods325was just $8, compared with more than $247,000 for white326communities. That's a decade ago. An update to that report is327expected later this year. But it doesn't take another report to328know that we still have a lot of work to do.329    The racial wealth gap has widened over generations because330of unjust policies that exclude systematically and discriminate331against and ultimately restrict people of color from the means332to accumulate wealth. This is most evident in the challenges333that black-owned businesses face when trying to get a loan to334help their businesses succeed.335    In Massachusetts, 68 percent of black-owned businesses are336concerned about access to capital, double that of white owned337businesses. I'll say that again. Twice as many black owned338businesses have a problem with access to capital as white owned339businesses.340    That concern is well founded. About two thirds of341entrepreneurs use personal or family savings to start a342business. That means those without generational wealth start at343a disadvantage. In fact, black-owned businesses are more likely344to apply for financing, but twice as likely to be denied as are345white businesses. And that is unacceptable.346    It is our responsibility to support efforts to rectify347historical injustices and offer real opportunities. So, I've348been proud to fight with Senator Warren and Congresswoman349Ayanna Pressley to secure funding for organizations across the350Commonwealth like BECMA and RCC to support their efforts to351close the racial wealth gap. Our work is more important than352ever.353    And this administration continues to turn back the clock on354progress by dismantling the Minority Business Development355Agency, the only Federal agency dedicated to helping minority356owned businesses, attempting to shut down community development357financial institutions, which largely deliver needed capital to358underserved communities, and barring immigrants, including359green card holders, refugees, and DACA recipients from360receiving small business administration loans.361    This is not America first. This is hate first. Hate362directed at black and brown communities in our country who are363seeking to become a part of this economic engine of growth,364which is the envy of the world, but which has always had365barriers to entry. And they're only trying to make it more366difficult by what they have done just in their first year.367    So, this is not progress. That's only propaganda. That's368all we're hearing, and it's not opportunity for all. It's just369an oligarchy for the few. We will not go backwards. We must370reimagine a brighter and more inclusive future for everyone.371One where we actually close the racial wealth gap. This gap372isn't just a moral and policy failure, it robs us of our full373potential as a society to not have everyone included in this374economic opportunity, which we call the United States.375    That is why I am introducing the SPARK Act. So, my bill,376which supercharges the existing infrastructure with new grant377dollars for entities like Roxbury Community College, and378creates a new program that provides direct grants to379underserved entrepreneurs, direct grants to those380entrepreneurs. And that work mirrors the work that the groups381here are already doing. That's what we're going to be talking382about.383    The SPARK Act would expand their work to reach384entrepreneurs shut out from opportunity. This is important385because a vision without funding is a hallucination. If we want386to have all these barriers broken down, if we want more black387and brown business people to be successful, we have to ensure388they have the funding. That's what my bill will do. The SPARK389Act is just the beginning, and I will continue to fight to390reduce the racial wealth gap at the highest levels of391government.392    And while I won't be signing with the Celtics anytime soon,393I'm proud to be on a team with Jaylen and everyone here today394to uplift the next generation of underserved entrepreneurs and395work to close the racial wealth gap here in the Commonwealth396and across the country.397    So, Jaylen's mother, Mechalle, who is here on behalf of398Jaylen today, they work in partnership on these issues, said,399``Who you are is measured by the mark you leave on the world.''400And to truly leave a mark on the world, you have to do the401right things and speak out against the wrong things. And today,402we are not agonizing, we're organizing to do the right things403and to speak out against the wrong things.404    So, we thank everyone for being here today. We have an405incredible panel of experts who have joined us here today.406    And I am the Senior Democrat on the Small Business407Committee for the United States Senate. And with a little bit408of luck, I'll be back here in January of next year as the409chairman of the Small Business Committee in the United States410Senate, and that's what we're going to work towards411accomplishing. And then we're putting the SPARK Act right at412the top of the small business agenda for the country.413    So, I'm pleased to welcome our first panel of witnesses.414Ms. Mechalle Brown is the president of the 7uice Foundation, an415organization founded by her son, Jaylen Brown, that aims to416bridge the opportunity gap for youth in underserved417communities.418    Mechalle is also an educator with experience as a professor419at Cambridge College and is an activist. She is here today to420testify both on her own behalf and on Jaylen's behalf as the421founder of the Boston Xchange, which provides underserved422entrepreneurs with resources, support, and opportunity for423their vision for what they can accomplish.424    And next, we're going to have Mrs. Lauren Holiday. She and425Jrue Holiday, are the founders of JLH Social Impact Fund, which426supports initiatives that focus on equitable outcomes for black427and brown communities. JLH partners with local organizations428and leaders in order to provide the support which they need to429be successful, holistic support to minority communities.430    And Ms. Lauren Holiday is also a former professional soccer431player, two-time Olympic Gold medalist, FIFA Women's World Cup432champion and is a Boston Breakers alum. And she is going to be433joining us virtually. And we look forward to hearing Lauren434from you in just a little bit. And thank you for all that you435do.436    So, let's then begin with you, Mechalle, thank you for all437of your work. You and your son have helped to create incredible438framework for how we have to move forward much more rapidly.439And so, without further ado, welcome and whenever you feel440comfortable, please begin.441442 STATEMENT OF MS. MECHALLE BROWN (ON BEHALF OF JAYLEN BROWN),443            PRESIDENT, 7UICE, WALTHAM, MASSACHUSETTS444445    Ms. Brown. Ranking Member, thank you so much for having me.446It's a pleasure to be here. As Senator Markey stated, my name447is Mechalle Brown. I'm the president of the 7uice Foundation,448which encompasses Boston Xchange and also Bridge programming.449Jaylen who plays for the Boston Celtics is the founder of450Boston Xchange and also the co-founder of the Boston Creator451Accelerator.452    So, I am here today on Jaylen's behalf, myself as well, to453firsthand talk about why the SPARK Act matters. Not from just a454policy perspective, but from what I've seen firsthand in the455communities that we care about since living here for 10 years.456    So, over the years, I've witnessed minority communities457face challenges, not because people weren't talented or458hardworking, but because the systems weren't built for us. Jobs459disappear, businesses close, wealth continues to leave our460neighborhoods instead of staying and circulating.461    When Jaylen got to Boston, he wanted to do something462different, not just a charity or a one-time donation. He wanted463to build infrastructure, a platform where people could own,464create, and build businesses that last. And that's why he465founded Boston Xchange as well, to create pathways for466entrepreneurs, artists, and creators to access the resources,467networks, and support they need to succeed.468    He knew that alone wasn't going to be enough. The founders469need mentorship. They also need access to capital. They need470partners who understand the barriers they're facing and to help471them to try to navigate through those issues as well. That's472why we partnered with Jrue and Lauren Holiday, MIT, Harvard473Business School, and Suffolk University to create the Boston474Creator Accelerator.475    The beauty of the Boston Creator Accelerator is not just476one organization doing everything. It's a big collaboration.477MIT brought curriculum and technical expertise. Harvard brought478investor and readiness training. Suffolk brought legal support.479So, Jrue and Lauren brought learned experiences and funding,480and also a national lens on this. Boston Xchange provided the481platform and long-term commitment.482    Together, we support the 10 founders over multiple years.483Not a quick program, but sustained support. Those founders have484also created jobs. They built real businesses, and they've done485it in communities such as Roxbury and Dorchester communities486that don't usually get this kind of investment.487    What Jaylen and I have learned is that real economic power488comes from ownership. Not just having a job, but owning the489business, owning the building, and owning the block. When490communities have those resources to build and capital491circulates within the community, instead extracting it out,492that's when you create generational wealth, not just jobs.493    But here's the reality. Most communities don't have the494infrastructure to make that happen. Founders are out here495grinding, they're out here taking a leap into entrepreneurship496because they have to, not because they want to, and we're497asking them to do it without the support system that makes the498business succeed.499    The SPARK Act is about changing that. It would fund500accelerators and incubators across the country, not just for501six months, but for five years with the possibility of renewal.502So, it would require that kind of partnership that we built in503Boston: universities, lenders, community organizations working504all together. And it will provide founders with access to505capital, not just advice. That's how you turn survival into506sustainability and necessity into ownership.507    When you invest in people and give them the infrastructure508to succeed, it begins not just to be a program, but real509sustained support. They build businesses, they create jobs,510wealth, and opportunity in their own communities. The SPARK Act511would make that possible nationwide, not just in one city, but512everywhere.513    It is an honor to be included in this historic moment, and514we eagerly anticipate stories that the SPARK Act will ignite.515Thank you so much.516    [The prepared statement of Ms. Brown follows.]517    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]518519    Senator Markey. Okay. Thank you so much. Great testimony.520And now remotely we are going to hear from Lauren Holiday.521Welcome. And whenever you feel comfortable, please begin.522523 STATEMENT OF MRS. LAUREN HOLIDAY, FOUNDER, JLH SOCIAL IMPACT524                 FUND, LOS ANGELES, CALIFORNIA525526    Ms. Holiday. Hi, everyone. Ms. Mechalle, I wish I was there527to give you a hug. [Laughter.]528    Ms. Brown. So sweet. I miss you.529    Ms. Holiday. I miss you, too. Ranking Member, thank you for530this opportunity. My name is Lauren Holiday. I'm here today to531talk about why Senator Markey's SPARK Act matters, not just for532Boston, but for communities across the country.533    Over the past several years, through the Jrue and Lauren534Holiday Social Impact Fund, we've had the privilege of535supporting entrepreneurs in cities nationwide. Boston, New536Orleans, Los Angeles, Milwaukee, Indianapolis, and beyond. What537we've learned is this: entrepreneurs don't fail because of the538lack of talent. They fail because the systems around them are539fragmented.540    And when you're building in underserved communities, those541systems aren't just fragmented, they're often absent entirely.542What we've seen work is we didn't start with a theory. We543started listening to founders and asking, what do you actually544need? The answers were consistent across every city.545    Long term support and short-term grants. Founders don't546need a check that disappears after six months. They need547partners who commit for years, who are there when revenue is548slow, when pivots are necessary, when the work gets hard.549Trusted relationships, not transactional. Businesses grow when550they're supported the way families support each other, with551patience, trust, and genuine investment in their success.552    Coordination across institutions, not isolated efforts. Not553a single organization can provide everything a founder needs.554But when universities, lenders, accelerators, and community555partners work together, founders don't have to navigate alone.556    Through our work in Boston, we supported an entrepreneur557named Tracy, the founder of Little Cocoa Bean, a children's558food business, rooted in community and culture. What got her559across the finish line wasn't a single grant or program, but560all of us together, wrapping around her, government partners,561philanthropy institutions, customers, community members,562operators, walking the journey with her.563    That collective support helped Tracy open her newest564location at the Boston Children's Museum at the Seaport. And in565her own words, she could not have done this without people566staying in it with her from start to finish. That's the model567we've built through our work, through the Boston Creator568Accelerator, in partnership with Jaylen's Brown Boston Xchange,569MIT, Harvard Business School, and Suffolk University. And it's570the model we've seen work in other cities when the right571partners come together.572    Why this needs to be national not just Boston. In Boston,573we received over 2000 applications for 10 spots. In New Orleans574founders told us the same story. Talent everywhere,575infrastructure nowhere. In Los Angeles, in Milwaukee, and every576city we've worked, the pattern is identical. Entrepreneurs are577taking the leap, not because they have an innovative dream but578because they have to feed their families.579    Traditional employment is disappearing, industries are580restructuring, corporations are moving their workforce581offshore, and people are left with no other choice, but to bet582on themselves starting businesses out of necessity, not583aspiration. But survival without support leads to failure.584    The SPARK Act recognizes that if we want entrepreneurship585to be a viable path for everyone, not just those with access to586wealth, and access to the elite networks and capital, we have587to invest in the institutions that can provide that support at588scale, not in one city. Everywhere.589    What the SPARK Act gets right is this Bill reflects what590we've proven works. Multi-year commitments, five-year funding591with the possibility of renewal. That's what allows real592relationships to form and businesses to grow sustainability.593Required collaboration, the bill mandates partnerships between594universities, lenders, accelerators, and community595organizations. That coordination is what makes ecosystems596function.597    Place-based design. Every community is different. The bill598recognizes that solutions have to be rooted locally, led by599people who understand the context. Capital paired with support.600The financing provision is critical. Founders need more than601mentorship. They need resources. This bill provides both.602    What's at stake? Community isn't transactional, it's603transformational. When you love your community like family, you604don't just write a check and walk away. You build systems that605last. The SPARK Act is about building those systems nationwide606so that every community has access to the infrastructure that607makes entrepreneurs possible. Not as the privilege, as a path608forward.609    We've seen what happens when you invest in people and610institutions the right way. Businesses grow, jobs are created,611wealth stays local instead of extracting out. The SPARK Act612would make that possible at a scale we can't achieve alone.613Thank you.614    [The prepared statement of Ms. Holiday follows.]615    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]616617    Senator Markey. Beautiful. Thank you so much for your618testimony. If I may, I'd just like to ask a couple of619questions. First of all, why did you and Jaylen just focus on620entrepreneurship? Why is that, from your perspective, the key621that you have decided to put the spotlight on?622    Ms. Brown. Well, with being in the community Jaylen saw623that same article that you spoke about earlier and wanted to624give people, like I said, just not jobs, but the ability to own625or to create their own. So, with that being said,626entrepreneurship was what we talked about and how that would be627successful, for if they had, you know, continued resources and628funding to be able to create their own opportunity.629    Senator Markey. Yes. Lauren, what drew you to this one630issue, you, and Jrue?631    Ms. Holiday. It actually started during the pandemic when632the guys were going to the NBA bubble, and I was pregnant with633our son. And during the time, like George Floyd had just634happened, all of these things just happened, and my husband was635having a hard time figuring out why, or like what mattered, to636go back to the bubble to play basketball when there was such a637divide in our country of racial divide.638    And we were brainstorming and I asked him what would make639it worth it, and not going to the bubble, maybe would've made a640stand, but it wouldn't have made an impact that we wanted. And641so, he decided to donate the rest of his salary for that year,642$5.3 million to support black-owned businesses and black-owned643nonprofits, black and brown owned. And so that is really what644inspired us. It was just seeing the need during a pandemic,645during a time of social unrest that the black community was646disproportionately affected.647    Senator Markey. Yep. Beautiful. And do you have a story or648two that each of you might want to bring to this issue that649kind of sticks out in your mind? Someone you met, some650opportunity that you really thought should be able to get help,651but was denied that help? Do you have an example, Mechalle?652    Ms. Brown. Well, I have two, but Lauren talked about Little653Cocoa Bean, which was one of them, I spoke at when they opened654at the Children's Museum, but also the Sneaker launch, which655was Sydney's project. And we just saw that once that was there656with the support that, how it spiked his sales and able to help657him gather what he needed, like being able to be a part of the658cohort. And learn and grow what we saw what that was doing, and659wanted to continue to be able to do that.660    Senator Markey. Thank you. Lauren, do you have a story?661    Ms. Holiday. Yeah, I feel like we have so many stories. One662that really sticks out to me. I told you about Tracy from663Little Cocoa Bean, but a story from Milwaukee, actually. There664was a woman that was teaching yoga in inner city schools to665make sure that the kids had proper mechanisms to cope with the666traumas that were around them and what was happening. And she667was trying to open her own studio.668    And through our JLH they were able to crowdfund almost or669over $100,000, and she has been thriving ever since. And I feel670like these stories just continue to happen. Like once the671investment is there, they're able to thrive.672    Senator Markey. Oh, excellent. So, what's the one message673if you're going to sum up what your message is, what Jaylen's674message is, you Lauren, what you and Jrue, what is your message675to the community? What is your message to Washington in terms676of what you think has to happen to unlock all this potential677Mechalle?678    Ms. Brown. Sure. I believe that our vision, like you said,679to unlock the potential for Boston Xchange would be to help680rebuild what was stripped away. And this would be able to681nurture a local economy rooted in innovation, inclusion,682culture, and care. So, I think with that being the message that683we need, the resources regarding to build up the communities684again, that they were there at one time or not really, but we685want to build those up. So that, I think would be our message,686is to be able to come together and nurture the local economy.687    Senator Markey. Okay. Thank you. Lauren, what's your,688message?689    Ms. Holiday. I think the message that my husband and I690always say is, ``cause creates community, but contribution691creates belonging.'' And in our communities, we need to692contribute so that everyone feels like they belong. And I can693use Boston as an example. Us going to Boston and being able to694contribute, we still feel like Boston is home. We have created695a family with Jaylen Brown, with Miss Mechalle.696    We have been able to create a family with our Boston697Xchange cohort. And that isn't possible if we didn't actually698contribute to that. And so, I would say cause creates699community, but contribution creates belonging. It is our job to700contribute to our communities.701    Senator Markey. Yes. Well, that's what you're doing. These702two families have given us a vision for what is possible, for703how we have to focus on the issue, but then work across all704segments of the community in order to ensure that we see the705progress, which we know can happen, right? It's just a706stultification of human potential.707    And unfortunately, once again, president Trump over the708weekend in his insulting comments about Barack and Michelle709Obama, have demonstrate how hard we have to work in over to710overcome that historic bigotry which has led to this denial of711access to the financial capital that unlocks human capital in712the black and brown communities in our country.713    So just this hearing is actually could not be on a better714day than after what we just saw this weekend. It just says we715have to work a lot harder and we have to win this year so that716then we can pass the SPARK Act and have that funding be made717available.718    So, we can't thank you enough for all of the work, which719the two of you have done. And maybe we could all just give a720warm round of thanks to Mechalle and Lauren. Thank you for all721of your great work. Thank you so much, and thank you for being722here.723    Ms. Brown. Thank you.724    Ms. Holiday. Thank you.725    Senator Markey. Now we're going to move to our second panel726and we can we can hear from them and their comments reinforcing727what Ms. Brown and Mrs. Holiday have already laid out for us.728While we're waiting for that, I see actually Gladys Vega is729here. Gladys Vega is the CEO of La Colaborativa, which is in730Chelsea, but it just serves so many other communities in the731greater Boston area. And she is here as just an incredible732leader, incredible spokesperson for all of those in need,733including entrepreneurs to get access to the Capitol, which734they need.735    And we're also joined by counselor Miniard Culpepper, who736has joined us as well. We thank you for joining us today. And737would you like to say a word before?738    Mr. Culpepper. It's amazing. I didn't think he was going to739give me the mic, but I thank Senator Markey for giving me two740minutes. Senator Markey and I go way back when Ted Kennedy ran741for president. That's when I first met Senator Markey. Some of742you weren't even born.743    And so, we've been working in the trenches. Remember, he744was at the State House, and he went to Congress, and now he's a745Senator. And the good news is that we've done some good things746together. This is a great hearing because I think it connects747with some, I just got off a conference call and what we talked748about for city council next week, Senator, is we're having749Black History Month.750    And the thing for Black History Month that the city council751has laid out is economic empowerment for our community. And so,752Senator Markey is always on the right side of issues. When he's753not you can always give him a call, but he stands with us and754for us.755    When I was running this summer, you know who I called, Ed756Markey. And let me tell you what he did. Yep. He did something.757He walked up Nazing Street. That was the first time a United758States Senator had ever walked up Nazing Street in Roxbury in759the history of this Commonwealth. And he knocked on doors and760talked to folks. That's the kind of Senator he is. He goes into761the neighborhoods where you'll never find a Senator.762    So, I just want to thank you for inviting me to be with you763today. And just give me a call. Just call my name. I'll be764there. Thank you, Senator Markey.765    [Applause.]766    Senator Markey. Great. Thank you. And again, the SPARK Act,767it's a big bill. It's $500,000 per year per organization for768five years in a row, guaranteed. And so, it's a lot of money769per organization. And then you seed it in community after770community across the country then you can see the difference771which it would make.772    So now I'm excited to introduce our second panel of773witnesses. Ms. Renee King is the CEO We Are The Funders. Ms.774King works with Boston Xchange and JLH social Impact Fund to775support minority entrepreneurs in Boston. Her work focuses on776providing funding and other long-term support for black-owned777businesses. So, welcome, Renee, whenever you're comfortable,778please begin. So, whenever you're ready Ms. Renee King please779begin. Thank you. Can you move the microphone in a little bit780closer?781    Ms. King. How's that?782    Senator Markey. Good. Beautiful.783784 STATEMENT OF MS. RENEE KING, CEO, WE ARE THE FUNDERS, NEW YORK785786    Ms. King. Okay. So, Senator Markey and team, thank you for787the opportunity to testify. Good afternoon, everyone.788    So, my name is Renee King. And for the last several years789I've worked alongside founders, institutions, community leaders790supporting entrepreneurs who are building businesses because791they had innovative ideas and they also had to. And the792solutions they needed to support them didn't exist around to793help them get to the final stage of where they're going.794    And now, also, I'll echo the statement that jobs also don't795exist too. So, a lot of these entrepreneurs, the future of work796is entrepreneurship. That's the reality that we are in right797now in this economy. And when we see traditional employment798disappearing, entire industry is restructuring, and millions of799like Americans in our communities they're taking this leap into800business ownership. Not only because, you know, they have an801idea, but also out of necessity.802    We have a problem if we're asking them to jump in without a803net, right? We have a huge problem at hand. And the problem is804that we're leaving entire communities without the805infrastructure to turn survival into sustainability, without806the mentorship, the networks, the capital, the coordination807that makes businesses succeed instead of fail.808    And that result isn't just the inequity that we see in809reducing the rate, this view in causing this huge racial wealth810gap that we do see. But it's also economic loss for all of us,811right? We are literally leaving tons of money on the table.812We're leaving money on the table, talent on the sidelines, and813capacity untapped.814    Senator Markey SPARK Act is about stopping that loss. It815invests directly on the ground ecosystem builders, the place-816based community informed institutions that already know how to817mobilize our communities into ownership, like guide them into818entrepreneurship success.819    These are the institutions that can scale support at the820speed at the current moment right now demands and it pairs that821ecosystem support with capital, with funding, because as ready822as you are to be able to jump into becoming an entrepreneur,823readiness without funding is just another barrier.824    We can't afford to leave entire communities unresourced825while the economy restructures around them. That's what I want826to talk you through today. Over the last several years, I've827had the opportunity to work with athlete led platforms like828Jrue and Lauren Holiday, Social Impact Fund, community829development institutions, corporate partners to support830founders in not just Boston, but New Orleans, Kentucky, LA and831so many cities beyond.832    And what we've learned in that work is this: entrepreneurs833do not fail because they lack the talent and the ideas, they834fail because the systems around them are not connected. Too835often the support is short term. The programs end just as the836entrepreneur is experiencing momentum. Momentum builds, and the837institutions that are here that are doing great work, sometimes838we're doing this great work, but we're operating in silos and839the capital arrives too late, or the support arrives too late840or not at all for these entrepreneurs.841    So, the gap between this readiness and access is where our842businesses are dying. But when you resource to institutions843that are rooted in community and culture, institutions that844understand local context, that build long-term relationships845with the businesses in the community that coordinate across846sectors, entrepreneurs truly succeed.847    They don't just survive, they succeed. They raise capital,848they hire, they scale, and the wealth they create, it stays in849the community, right? And that's what ecosystem building looks850like when it's done right.851    The SPARK Act matters because it reflects what actually852works, which I love that. Like it's taken in a lot of input and853insights from folks who are doing great work already. It854recognizes that ecosystems are not short-term pilots. They855require time, trust, and multi-year commitment. It prioritizes856collaboration between accelerators, lenders, educational857institutions, government, philanthropy, conscious consumers,858and local partners.859    Like, it pulls all this together and that mirrors how860successful ecosystems actually function. And critically, it861acknowledges that ecosystem support must be paired with capital862funding. That's mission critical.863    I want to specifically lift up the financing provision in864the bill. From experience I've been ready to start a business.865I've started multiple businesses and didn't have the capital866and the funding stays, and then everything stalls and867everything goes out the door. And without capital or funding,868that's what happens. You stall the economic growth of a869business that can totally grow and survive.870    Founders can complete every program. They can build the871plan, they can get investment ready and still hit a wall872because they do not have funding, they don't have collateral,873they don't have credit history, they don't have the right874relationships, right? To give them the capital to fuel them to875the next milestone, to the next step.876    And that gap, yes, it is causing the racial wealth gap, but877it's also causing a huge economic gap in just our U.S. economy878period. So, the financing provision in the SPARK Act addresses879this by pairing grants and also lower cost loans with trusted880ecosystem operators who can get it out to these businesses and881get them the fuel they need.882    This is really important because it treats capital as being883catalytic. It unlocks momentum, it covers the gap between idea884and traction. And this is what's needed. This is what our885entrepreneurs need to be able to sustain. And the success of886this provision will depend on thoughtful implementation.887    But its inclusion materially strengthens the bill by888addressing a barrier entrepreneurs face every single day. So, I889want to be really, really clear of what's at stake. The economy890is restructuring automation. You have AI, you have industry891consolidation, you have traditional employment pathways are892disappearing faster than we're creating new ones.893    Entrepreneurship is not only like just for those who have894innovative ideas. It's not only a side option anymore. It's895going to be how many of us are going to survive. That's it.896Entrepreneurship is going to be the future. And we're not897ready. We don't have the support systems ready to support the898amount of entrepreneurs that are here right now, and that want899the entrepreneurs to come. We're asking entire communities to900build without the infrastructure to succeed.901    So, the SPARK Act doesn't attempt to impose like a top-down902solution and invest in the institutions that already know how903to do this work. And it scales what is already working. This904isn't as aspirational; this is economically necessary.905    If we want an economy that actually works, that doesn't906leave entire demographics on the sidelines while industries907restructure around them, we have to resource, the institutions908that can mobilize all communities into ownership, not just some909communities. We are leaving too much money on the table with910the current way that we're doing this work.911    The SPARK Act is about stopping that loss and building the912infrastructure this moment demands. And I'm really grateful to913have the opportunity to testify and to support this and endorse914this act. And I love the work that you all have done, and thank915you.916    [The prepared statement of Ms. King follows.]917    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]918919    [Applause.]920    Senator Markey. Thank you, Renee, and great work. And thank921you for your help in putting this together today, Renee.922Absolutely indispensable. And I'm just going to lay out for you923what the vision is in the SPARK Act because not just Renee, but924the other witnesses are now going to go into the sub details of925how then all of this would work.926    And so, the SPARK Act will create two programs, the SPARK927Program, and the SPARK Financing Program. Eligible928organizations, which may include non-profits, community929development finance institutions, CDFIs, which we will hear930from, minority depository institutions, lenders, participating931in small business administration programs, HBCUs, MSIs, and932community colleges can apply for both or one of these two933programs.934    The SPARK program, let me go through that first. The SPARK935program eligible organizations can apply to receive a minimum936of $500,000 annually for an initial term of five years. So,937it's a minimum of $2.5 million over five years to establish or938expand accelerator or incubator services for underserved small939businesses.940    And this funding would be used for administrative,941staffing, and other infrastructure needs associated with942funding accelerator are incubator programs. The second program,943the SPARK Financing Program. Eligible organizations can apply944to receive either one up to $1 million annually if they also945receive funding under the SPARK Program and up to $500,000946annually if they don't receive funding under the SPARK program.947    This funding would be used to provide financing directly to948underserved small businesses. Organizations that receive this949funding can either provide grants of up to $20,000 are950subsidized loans directly to underserved small businesses. So951that's kind of the core idea that it's institutionalized. It's952there. We have professional organizations and then we have the953businesses that know where they can go to in the community in954order to get the funding which they would need.955    So that's the concept which I've built into the956legislation, and I think it fits exactly what Boston is already957trying to unleash.958    So, we're next going to hear from Keith Mahoney, who is the959Vice President for Communications and Public Affairs at the960Boston Foundation, one of the nation's first and most impactful961community foundations that aims to advance economic justice and962equity in Massachusetts. And Mr. Mahoney manages the963foundation's research and public policy initiatives. Welcome.964965      STATEMENT OF MR. KEITH MAHONEY, VICE PRESIDENT FOR966   COMMUNICATIONS AND PUBLIC AFFAIRS, THE BOSTON FOUNDATION,967                     BOSTON, MASSACHUSETTS968969    Mr. Mahoney. Thank you, Senator Markey for convening this970field hearing and for your longstanding leadership on economic971justice and opportunity. We're especially grateful for your972work on the SPARK Act, which will make a real difference for973thousands of Massachusetts small businesses.974    As you said, my name is Keith Mahoney. I'm a vice president975at the Boston Foundation, 111-year-old public charity with a976simple but enduring mission: to improve lives and strengthen977communities.978    Philanthropy can often take risks and make investments that979government is unable or unwilling to do. Hopefully, the work we980have done here in Boston will demonstrate the wisdom behind the981SPARK Act.982    In 2020, as COVID laid bare deep racial inequities, and as983the country reckoned with the murder of George Floyd, some hard984data cut through the noise. A U.S. Department of Commerce985report showed that businesses owned by people of color were986denied loans at twice the rate of white owned businesses.987    And when loans were approved, the interest rates were on988average 22 percent higher. These disparities weren't new. But989seeing them documented so clearly prompted many financial990institutions to make public comments to support businesses of991color. Too many of those commitments did not last.992    As political climates change too often, resolve changes993with them, and that's a problem because the small business994community in Massachusetts is becoming more diverse every year.995New businesses are far more likely to be black owned, Latino-996owned, or woman owned than older ones. If we are serious about997growing our economy, we cannot afford to ignore that reality.998    For community foundations like ours, that is precisely when999the responsibility becomes clearest. At the Boston Foundation,1000we believe that equity work must be durable, not fashionable.1001That belief is why we launched the Business Equity Fund in10022018, well before the 2020 National Reckoning.1003    The goal of the fund is straightforward: to help establish1004businesses of color, grow, create jobs, build we wealth and1005strengthen their communities. The fund provides patient1006flexible, low-cost capital to businesses that are already1007performing, but are too often locked out of traditional1008financing.1009    Here's what that's looked like so far. 7 businesses have1010received 2.3 million in loans. The fund has attracted nearly 61011million in additional investment, bringing total capitalization1012to 8.8 million. Early leadership funding came from Eastern1013Bank, alongside significant support from the foundation. And1014the Business Equity Fund doesn't operate in isolation. It's1015part of a broader ecosystem that recognizes simple truth.1016Capital alone is not enough.1017    That ecosystem includes the Business Equity Initiative,1018which provides grants to organizations offering technical1019assistance, professional networks, and industry specific1020expertise. And the Greater Boston Chamber of Commerce1021Pacesetters initiative, which encourages major employers to1022direct more procurement dollars to businesses of color. It's1023this coordination, capital, technical assistance, and market1024access that makes the work effective and scalable.1025    At a moment when we talk rightly about trillions of dollars1026in national investment, the Business Equity fund offers a1027lesson in how smaller targeted interventions can deliver1028outsized returns when they are trusted, locally rooted, and1029built for the long haul.1030    Let me give you one example. OutKast Electrical1031Contractors, a growing black-owned firm based in Dorchester was1032at a crossroads in 2024. The company employed 60 local union1033workers when its financial partners abruptly closed its line of1034credit, leaving bankruptcy as the only apparent option. LEAF,1035the Local Enterprise Assistance Fund, and a Boston Foundation1036grantee stepped in, helping OutKast navigate out of bankruptcy,1037stabilize operations, and build a more secure future. This is1038only one story among many. innovative companies in overlooked1039communities that can now not only survive, but grow and thrive.1040    Senator Markey, if we're serious about closing the racial1041wealth gap and strengthening the Commonwealth's economy from1042the ground up, we must invest in models that endure political1043shifts, center lived experience, treat equity as a permanent1044commitment, not a temporary response.1045    That's why we're so excited about the SPARK Act. It1046reflects common sense policy that extends a lifeline to small1047businesses and strengthens our economy. Patient equitable1048capital can work. We have shown that locally the SPARK Act will1049bring that to scale. The Boston Foundation stands ready to1050continue this work and to partner with leaders who understand1051that economic justice is not optional infrastructure. It's1052essential. Thank you.1053    [The prepared statement of Mr. Mahoney follows.]1054    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]10551056    Senator Markey. Okay. Thank you, Mr. Mahoney. We're going1057to hear from Nicole Obi. Nicole is the President of the Black1058Economic Council of Massachusetts. BECMA is a nonprofit1059organization that builds black wealth across Massachusetts by1060supporting and empowering businesses and removing barriers to1061opportunity and prosperity for the community.1062    Ms. Obi is an entrepreneur and serves on the Governor's1063Advisory Council on Black Empowerment. Congresswoman Presley1064and I and Senator--we were able to give $1 million to BECMA a1065couple years ago to help with their structure. We were able to1066add $700,000 this year to further augment that work, which you1067do inside of the community. Your organization's kind of a1068beacon for plaque entrepreneurship, and we thank you so much.1069    So, whenever you're comfortable, please begin.10701071STATEMENT OF MS. NICOLE OBI, PRESIDENT, BLACK ECONOMIC COUNCIL1072       OF MASSACHUSETTS, ROXBURY CROSSING, MASSACHUSETTS10731074    Ms. Obi. Thank you, Ranking Member Markey, and thank you1075for the opportunity to testify today. And thank you for your1076leadership on behalf of America's Small Businesses.1077    BECMA, we are a statewide member-based nonprofit focused on1078closing the racial wealth gap by helping black-owned1079businesses, 700 to date in the last four years. We help them to1080start, grow, and scale, and by strengthening the economic1081ecosystem that supports them.1082    And I appreciate the committee's focus on uplifting1083minority entrepreneurs, because as we've heard, the challenges1084they face today are not abstract. They're structural,1085compounding, and increasingly shaped by Federal policy1086decisions.1087    Black and minority entrepreneurs are more likely to start1088businesses, yet less likely to access adequate, affordable1089capital, professional support, or growth stage opportunities.1090Even the profitable firms are denied financing at higher rates.1091And when support does exist, it's often short term, fragmented1092or disconnected from the places where entrepreneurs actually1093operate.1094    At the same time, these longstanding barriers are colliding1095with new pressures. Tariffs and supply chain disruptions have1096raised the cost of goods and materials, and inclusive1097procurement pathways are narrowing as agencies and private and1098public companies pull back amid legal and political1099uncertainty. Immigration enforcement actions, even when not1100directed at a specific business, are destabilizing local label1101markets and reducing foot traffic in entire neighborhoods. So,1102fear alone has economic consequences.1103    For black owned businesses, which are more likely to1104operate with thinner margins and less access to flexible1105capital, these pressures don't just slow growth. They force1106businesses to freeze hiring, reduce hours, delay expansion, or1107exit the market altogether. And this is not anecdotal. It's a1108predictable pattern we are seeing playing out across many1109sectors, and that's why the SPARK Act is so important and why1110its timing matters.1111    What distinguishes Senator Markey's SPARK Act is that it1112does not treat entrepreneurs as isolated actors who simply need1113more advice or resilience. It recognizes that successful1114businesses grow with strong local ecosystems, and that those1115ecosystems require sustained investment. The SPARK Act invests1116in incubators, accelerators, and community-based lenders that1117provide trust, on the ground support in underserved1118communities.1119    And just as importantly, it pairs technical assistance with1120flexible financing, that helps to reduce collateral barriers1121and steers entrepreneurs away from predatory alternatives, and1122this combination is critical. From our experience at BECMA,1123this integrated approach is what actually changes outcomes.1124When entrepreneurs receive coordinated support, business1125advice, access to capital and pathways into procurement and job1126creation, businesses last longer, they hire locally and create1127wealth that circulates within their communities.1128    So, the SPARK Act also gets accountability right. By1129requiring reporting on capital access, job creation, wages, and1130participation by race and geography. It ensures that public1131dollars are tied to real economic outcomes, not just activity.1132And at a moment when data transparency is eroding, this1133commitment matters.1134    In Massachusetts, we've seen how fragile progress becomes1135when ecosystem funding is short term or disconnected from local1136realities. The SPARK Act offers a durable national framework1137that scales what works, while allowing communities to tailor1138solutions to their unique challenges.1139    Senator Markey's leadership on this legislation sends a1140clear message: Minority entrepreneurs are not a niche concern.1141They are central to America's economic resilience. And when1142black and other underserved entrepreneurs succeed, families1143stabilize, wealth is created and regional economies grow1144stronger.1145    So, on behalf of BECMA and the entrepreneurs, we have one1146here, in the communities we represent, I urge this committee to1147advance the SPARK Act and continue investing in policies that1148make entrepreneurship a viable pathway to stability growth, and1149wealth building. Thank you.1150    [The prepared statement of Ms. Obi follows.]1151    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]11521153    Senator Markey. Thank you so much. Beautiful. And now,1154we're going to hear--and this is a key piece of testimony here1155because Karim Hill represents people who are already doing it1156right now. He's the president of BDC Community Capital, which1157is a Community Development Financial Institution, or CDFI, an1158SBA Community Advantage lender, and an affiliate of the New1159England Certified Development Corporation, a leading SBA 5041160lender in Massachusetts.1161    And Mr. Hill has extensive experience as a lender and was1162president and the CEO of the New England Business Association.1163So, we welcome you and whenever you feel comfortable, please1164begin.11651166 STATEMENT OF MR. KARIM HILL, PRESIDENT, BDC COMMUNITY CAPITAL1167             CORPORATION, WAKEFIELD, MASSACHUSETTS11681169    Mr. Hill. Thank you, Ranking Member Markey. And I want to1170thank you for all the work you have continued to do. And one1171thing I'll say about the Ranking Member is six years ago when I1172was running the New England Business Association, you did an1173interview with me before you actually went for this new term.1174    So, I really appreciate the fact that you are always1175accessible and you find a way to get down to the brass tacks of1176helping small business owners. So, thank you for all the work1177you have continued to do, and thank you for inviting me back to1178speak for this testimony today.1179    Again, as the Senator said, I'm Karim Hill. I'm the1180President of BDC Community Capital, and I'm the inaugural1181president. What that means is we actually started this program.1182I started this program in 2021. I was fortunate enough to get1183an investment from BDC Capital, which is the larger1184organization of half a million dollars in equity, and a line of1185credit of $5 million to lend out to minority business owners.1186    Once I received that, my job was to then go and find a way1187to make us U.S. Treasury certified, which is not an easy thing1188to do, right? It took us almost two years to go through all the1189steps to be U.S. Treasury certified. And then once we1190accomplished that in 2022, we started making our first loans.1191    Now, as I said, we had a $5 million line of credit. I had1192my own separate board. We're a 501(c)(3), and within the first1193year, we exhausted that $5 million line of credit. So now I had1194to go back to the banks and ask for more money, which we all1195know is not fun, right?1196    But as a former banker, I knew the words to say, I knew how1197to approach them, and we're able to secure a larger line of1198credit. Today, since 2022, we've made 185 loans and lent out1199more than $25 million to minority based small businesses1200throughout the New England region.1201    Now, the proudest piece of that is 92 percent of those1202loans have fit our target market. What's our target market?1203Every CDFI has to have a designated target market. Ours are1204African American small businesses, Hispanic-owned small1205businesses, and any small business in a low to moderate income1206area.1207    Ninety-two percent of our $25 million has gone to an entity1208in those target markets. And that's really why we're here.1209We're here to make sure that access to capital gets down to1210where it needs to be.1211    So, we at BDC Community Capital, we fully support the SPARK1212Act. And I want to read this appropriately because it deserves1213to be read. The reason we support the SPARK Act is because it1214allows the expansion of our personal efforts to underserved1215entrepreneurs. And it focuses on spurring economic growth to1216underserved communities. It encourages collaboration between1217the SBA and organizations that serve low to moderate income1218areas in minority and rural communities.1219    This is critical to supporting the local entrepreneurial1220ecosystem. Fostering and using the rails that already exist is1221critical. To get something what happens in a lot of areas and1222Boston's no different. We have well hearted people, people that1223have great ideas, great energy, they create something. But when1224you're not using the rails that already exist, it's hard for it1225to sustain.1226    Senator, I'm so proud that you're doing this the way you're1227doing it, because you're using the SBA, which already exists,1228that's important. And you're also using the SBA 504 program,1229which is critical. For those who don't understand what the SBA1230504 program is, it is vital to reducing the racial wealth gap.1231And here's why.1232    The 504 is a primary lender, lends out a bank or credit1233union lends out 50 percent loan to value on that project. The123440 percent is done by a CDC or ACDFI. Like us, we come in and1235do the 40 percent that leaves a 10 percent equity slug that the1236small business owner must provide.1237    We have gone out and created our own SBA 504 down payment1238program where we will give you up to $100,000 to fulfill that123910 percent equity piece. That is critical. It's critical1240because it takes a small business owner who is currently1241running his or her business very, very well, and allows them to1242truly build, close the racial wealth gap by owning their1243building.1244    That sustainability is key to minority business owners. We1245started this two years ago. I got the blessing of my board to1246do it. We had no grant funding to do it. My board just allowed1247us to go out and do this. We've now made 11 loans for just over1248$1.1 million.1249    And the best part about it, not a single default, no1250issues. It's testing and proving the fact that these small1251business owners know how to run their businesses, and they just1252need a little bit of more support to move forward. This is a1253critical component, and this SPARK program will allow us to1254enhance that with the funds you were talking about, Senator.1255    So, we are fully behind you on what you're trying to1256accomplish. And we're out in front trying to bring access to1257capital to those who truly need it.1258    Lastly, I want to make sure that everyone understands that1259this work cannot be done without my peers here. The work that1260these wonderful people do, they prepare small businesses for1261us, meaning my group, to actually provide the funding. What1262happens a lot is we will teach people what to do, but if you1263can't secure that funding, that knowledge is not going to get1264you where you need it to be.1265    Other CDFIs like myself, we are here and committed to1266making sure we get those funds to where they need to be.1267Senator, we fully support the efforts you're doing with the1268Spark program. I'm honored to be here and can't wait to answer1269any questions you may have.1270    [The prepared statement of Mr. Hill follows.]1271    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]12721273    Senator Markey. No, thank you. Great question. Great1274testimony. And again, this question of access to capital is1275throughout the entire system. So, the state of Massachusetts1276decided three years ago to make community college free.1277    So, you've got kids who come from the kind of communities1278that I came from when I went to Boston College, it was1279affordable. You could earn the tuition working during the1280summer. You could take out a small amount of student loans in1281order to do it. To go to Boston College or Boston University to1282go to any of these schools, now it's $90,000 a year. Who has1283that kind of money in the same streets that kids used to be1284able to say, I can earn that funding.1285    So free community college has meant here in Roxbury1286Community College, there's now more students here than there1287were before the pandemic, because they don't have to think1288about access to capital for their educational opportunities.1289And there's been a dramatic rise in those students all across1290the entire community college system, the entry level.1291    And so that's again, a smart business plan for1292Massachusetts, which should be replicated across the whole1293country. You know, we're not just the Bay State, we're the1294brain state too. We're looking ahead, thinking about the issues1295that everyone should have to deal with from an economic1296perspective. And that's what the SPARK Act is intended to deal1297with that issue when it comes to small businesses, to1298entrepreneurs graduating from the school.1299    The data though, Mr. Mahoney, let's lay out, if you can1300quickly. What's the data that you developed in terms of the1301racial wealth gap that has locked minority members out of that1302entrepreneurial world that then creates generational wealth?1303    Mr. Mahoney. So, I think there are a few different data1304points. Senator, you mentioned earlier the 2015 Color of Wealth1305study. And that is going to be redone this year. The Federal1306Reserve Bank of Boston with the Boston Foundation, Bar1307Foundation, Eastern Bank Foundation, and Greater Boston Chamber1308of Commerce are supporting that study.1309    And that is you know, going to look at economic conditions1310across the state. You know, the number may be different than1311the one that was burned into the brains of most Bostonians 101312years ago. But it will show that gap continues.1313    The other data point that I think is important is around1314the major legislation that passed earlier this year. The so-1315called Big Beautiful Bill Act, which is not only going to1316increase the deficit, but it's doing so by extending tax cuts1317to favor the wealthy and scaling back the social safety net,1318increasing border and security and defense funding.1319    The analysis from experts across the ideological spectrum,1320including the CBO, the Yale Budget Lab, Urban Institute,1321Brookings, all reached the same conclusion. The law will tilt1322heavily towards the highest income households.1323    According to the CBO families in the bottom 10 percent of1324the income gap lose about $120,000 a year, while those in the1325top percent gain roughly $13,600. So that is going to1326exacerbate not close the racial wealth gap in the years to1327come.1328    Senator Markey. And again, you're talking about access to1329educational healthcare, food benefits for those families,1330correct?1331    Mr. Mahoney. Correct. When families that can't afford it1332are paying more for healthcare or paying more for housing, or1333paying more for education to cover tax cuts for families that1334quite frankly, can afford healthcare education and the like,1335and housing, own homes already. That's where that comes in.1336    And the other, you know, home ownership is an important1337aspect of this, because that is a root of what is wealth as1338opposed to income. Income gaps may close as earnings change,1339but wealth is what gets passed down from generations. And1340wealth is what allows someone to start a small business, to1341afford higher education. When you own your house and you can1342put the equity in that to helping the next generation purchase1343their house, that is what has created the wealth gap over time.1344And that is a result of deliberate policies like redlining,1345discrimination on home loans and zoning decisions that were1346made over decades and decades.1347    Senator Markey. Yes, and my father drove a truck for the1348Hood Note Company, and I'm sitting here as a United States1349Senator, right? So that's what we have to provide for everyone.1350Well, no matter how they want to use their God-given abilities1351that they can kind of dream and become that.1352    But not if you're taking away funding, which is what the1353big ugly bill did beginning last July. Then people don't have1354the discretionary capital. They have to pay more in healthcare,1355more for education, more for food, more for everything.1356    And then that extra 20, 50, 100 grand that they might have1357put into a business, it's just not there, you know, because1358they just have to try to survive. So, Ms. King, access to1359opportunities and networks and capital are significant barriers1360for underserved entrepreneurs looking to start and run their1361businesses. How do organizations that you run provide an1362approach in supporting entrepreneurs? And why is this approach1363even more effective?1364    Ms. King. So, there was a lot of points, really great1365points that everybody set on here.1366    Senator Markey. Can you move the microphone down just a1367little?1368    Ms. King. Oh yes. There was a lot of great points that1369everyone said on here. And I don't know, I'm going to quote the1370African proverb where many of you probably have heard this,1371where it's like, ``it takes a village to raise a child.'' Have1372you heard that proverb?1373    It also takes a village to grow an entrepreneur, to grow a1374business, right? And the village has to be connected, right?1375And this is what you're seeing. Here is the village, right?1376We're all the village.1377    So, when we've built entire systems, when you think around,1378like, we kind of have like a pre-K to college system for like,1379if you want to go to school, this is the flow. But like when it1380comes to entrepreneurship, we don't really have that flow1381completely put together and coordinated, right?1382    We have folks who are doing it in the village who are doing1383different siloed approaches of it, but we don't have it1384completely through it. So, when someone starts a business, we1385tell them, go figure it out. Go find the resource, go piece the1386support together, piece the guidance you need together, even1387though we already have institutions right here who can1388collaborate, who can work together to ping pong around folks.1389    And that's what we're saying what I love about the SPARK1390Act starts to facilitate. Like, how do you make it even easier1391for all of us in the village? We already talk to each other. We1392already circulate and bounce entrepreneurs between each other1393because we know each other and can text each other and be like,1394hey, look at the Little Cocoa Bean, or look at this business.1395    But now imagine if that got strengthened to the point of1396where it's like a pre-K to college system, right? It's like1397strengthened and we have the resources that we need so that we1398can build that even better, because as Karim said, like he1399needs folks to be prepped before they get to him, right? And1400also, the folks in that prep, they need capital and resourcing1401right before they can get to him.1402    So, the gap is what happens with this gap. And they kind of1403call this kind of like the valley of death, I think is one of1404the things, you can look it up. In this gap, when we don't have1405us, all talking together and all the whole entire village1406activated, not just us, but also customers, government,1407philanthropy, everybody activated around this one entrepreneur1408and making sure she survives, she's successful to get where she1409is.1410    So, I'm going to give you another example of that. It's1411when you don't have that, then the entrepreneur fails. But what1412it looks like when you do have that is that when an1413entrepreneur comes, they have this product, it has demand1414already. Then you have like, MIT helps them build their1415technical capacity. Harvard preps him for investor1416conversations. Suffolk chimes in with legal support. RCC has1417done stuff with us too to support that entrepreneur.1418    And then you have Jrue and Lauren Holiday supporting them1419with their networks and funding. And Jaylen Brown is creating1420space and also pouring in his funding and opening up his1421networks. And they don't just operate during this one specific1422time, they're staying with them, right? They're part of the1423family of like; we're going to stay with this entrepreneur to1424get you through because maybe in about eight months you have a1425problem that you didn't even know was coming. So here it comes.1426    Now you're in this problem. So, then MIT comes back in and1427says, let me create this war room of all of our successful,1428like entrepreneurs who've been through your problem. Like, let1429them sit with you and get you through the problem.1430    Then you have a barrier in month eight, where it's like,1431okay, well Jrue is like, let me make a call to like, can we1432walk you in to get this partnership? This is what it looks1433like, right? It looks like we all have to be all-hands-on-deck1434for these businesses in our communities who need us, not just1435as customers, but they need us to also be the opener for all1436the next things that they need for them to survive.1437    And there were a couple data points that were like floated.1438I think we talked a lot. One thing why it's really important1439for the businesses in our communities to really thrive is1440because they're the first ones to pour back into the community.1441    There's a lot of data that shows that. Especially as black1442and brown business owners, when they reach and sell or get to1443the point of where they're like on shelves or they're IPO-ing1444or whatever it is, they're the first ones to turn back into an1445angel investor and double down and invest in the next business.1446    They're the first ones to give to the different solutions1447that need help on the ground in their community. So, if we1448don't support them, then the community, that's another gap you1449see of like the person who knows exactly what the community1450needs can't come back and resource their community that they1451love.1452    So, it's really important around that. One other data point1453I wanted to add in, and I was trying to find this to pull it. I1454think sometimes when we speak about this, and like we speak1455about this as like our black businesses, our brown businesses,1456they don't get access to capital, right? They don't get access1457to all these resources. We gave you all that data.1458    The other side of it, for you to intentionally not give the1459capital to black and brown businesses is wild. Because what1460other data point to know is that black businesses, with that1461little bit of resourcing that you give, they're shown to1462produce more revenue than other businesses who are well1463resourced. That's what the data shows.1464    There's been CFIs that we've spoken to where they'll tell1465us, you know, who doesn't default on the loan? Black1466businesses, and we're not giving them loans. Why? Like, you're1467intentionally blocking the economy. You're intentionally saying1468like, this is what you're doing.1469    So, this village, this is what we do. One of the things we1470were very intentional with Jrue, Lauren and Jaylen was like, we1471already knew there were folks right here in Boston1472intentionally building from like governors, mayors, Nicole,1473everybody was already building.1474    So, it wasn't for us to duplicate it, it was to come in and1475say, well, where do we fit in? How do we like ping pong things1476together and let's flow this together. And then like, now let's1477also invite the community and the customers in too, so that we1478have this beautiful wrapped around village, around the1479entrepreneur. And that's when you're going to see more success.1480    Where we're like, hands on everybody. It's like you have to1481treat them like family and we all have to be coordinated around1482this. Because if wherever you want to live, you want to see it1483thrive and grow, it depends on this, it depends on those1484businesses who are creating innovations to live right in your1485communities.1486    Senator Markey. Fabulous. Thank you. So, Nicole Obi, how do1487you interact with organizations like Boston Xchange and BDC1488Capital? What is the role that you play?1489    Ms. Obi. Our role is while we focus on black entrepreneurs,1490and as I mentioned, we've touched 700 of them directly. We also1491partner with other organizations that are also supporting small1492businesses. I often say that not all small businesses are black1493and brown, but almost all black and brown businesses are small.1494    And so, we partner, you know, it's the same challenges that1495we often face. So, we partner with Latino, Asian and LGBT1496communities as well. And we find that to be really important. I1497would say that last year we did a study of our member base and1498we found that 70 percent of the survey respondents said that we1499were the only source of support that they received. And so, a1500lot of times those are our earliest stage businesses or those1501that just haven't gotten any support quite yet.1502    And so, they are sort of the tip of the spear, the top of1503the funnel. And what we are really trying to do in partnership1504with others, including the folks here, is move people through1505different stage gates.1506    While we do provide grants, because that's a great way to1507start, for those businesses that are trying to get through1508those initial milestones, we too have offered loans and like1509Karim and like Renee just said, we've done 10 loans for a total1510of $850,000 and all of those loans are current or have been1511repaid. Those are very safe bets. And that's what we are really1512trying to make sure that traditional lenders understand.1513    A success to us is being able to spin those businesses out1514to traditional lenders and other CDFIs. And so, we've been able1515to accomplish that. Something else that we work on, and1516especially in partnership with other. So, Karim sits on a board1517that I chair for the state around procurement.1518    We know that grants are not going to sustain businesses1519indefinitely, but they are a great start. But it's really1520procurement that we think is an important next step in helping1521our businesses get and sustain themselves. And what we've found1522just in BECMA over the last few years, that it usually takes a1523couple of deals for our businesses to be able to sustain1524themselves at this new level. So, we really look to try to get1525them to that third deal mark.1526    But in the meantime, there's more support that we get from1527our partners, whether it's capital or professional services or1528advice. And so, there's a lot of ways that we are connected to1529each other. We happen to see a lot of the businesses maybe1530earlier stage, but to us, success is being able to have them1531advance and get support from others and having them take it to1532the next level.1533    Senator Markey. Fabulous. And Mr. Hill, we're going to give1534you the last word here. Bring it all together for us. 5041535Community Advantage program. Everything that you see here in1536terms of how it could all funnel into you out into the economy,1537businesses opening.1538    Mr. Hill. Yes. So, a lot of acronyms when you talk about1539the SBA, right? So, you've got 504, you've got community1540advantage. So how, how do those programs fit into the ecosystem1541of getting access to capital to minority owned businesses?1542Well, I'll give you one from each category.1543    The Community Advantage program, the reason it's so1544important is it allows a lender like me to make a loan to a1545company that's under two years in existence. Very few banks, if1546any, will do a loan for a business that's under two years in1547existence. The only way they will do it is if you have an1548exorbitantly high net worth because they're really not banking1549on the business. They're banking on you, right?1550    So, if you don't have a high net worth and your business is1551under two years in existence, there's really no place for you1552to go for financing except to a lender that has a Community1553Advantage tag.1554    Now, what would we do with the SPARK funds with that1555community advantage? How does that help? We can take a SPARK1556line of $1 million that Senator Markey was talking about and1557leverage that five times. So, $1 million can turn into $51558million in lending. That goes out in Community Advantage. Why?1559Because the SBA guarantees us 75 percent on every Community1560Advantage loan.1561    So, it allows us to leverage those dollars in a way that1562has true impact. So that's the first way on Community1563Advantage. The SBA 504, as I said earlier, with our down1564payment program, we can take a million dollars of SPARK funding1565and leverage that five times when it comes to that.1566    So, it allows us then to go out and reach to put $5 million1567out on the street, divide that by a hundred thousand. That's a1568lot of loans you can do. That's a lot of loans that can be put1569out to individuals who could not receive that. Here's the one1570data point I'll give you on the 504 piece. Here's why it's1571important. 504 money it's fixed. It's a fixed rate for 251572years.1573    If you run your business today, I can guarantee you one1574thing, your rent will not be the same for 25 years. Can1575guarantee that. If you do a 504 loan, your rent will be the1576same for 25 years. That's how it allows that business owner to1577grow. It allows them not only to have the asset, but it gives1578them certainty on the expense side.1579    Certainty is critical when you're running your own1580business. So that's how these programs, Senator Markey, can1581really help and really drive this racial wealth gap that we1582talk about so often.1583    Senator Markey. You're great. Thank you so much. Thanks to1584this incredible panel. Can we just give them a warm thanks for1585their incredible work.1586    [Applause.]1587    Senator Markey. We're at the center of kind of the economic1588revolution right here. I was able to put in $4 million for1589Roxbury Community College a couple of years ago, and they're1590renovating the Dudley House, which is right next door, which is1591going to become the Center for Economic and Social Justice.1592    And we were just able to put in $2 million into the Federal1593budget for Roxbury Community College for internships to learn1594and earn. So, we're seeding those programs right here at the1595school, and with this expert panel, we can see that these1596really, really smart, ambitious young people walking the curb,1597looking in are all wanting to maximize their God-given1598abilities. So that's what this is going to be all about.1599    This has been an incredible hearing today. I'm taking all1600of this back to Washington. My goal is to build a more1601equitable future for everyone to ensure that black and brown1602communities are fully integrated into our economy.1603    For anyone who is watching or would like to submit1604testimony, you have 14 days to submit testimony. It will be1605included in the congressional record, okay. So that we will1606have all of your testimony to help us to develop this program1607in a way that beginning next January will begin to really1608augment all of the funding that should be available for young,1609black, and brown entrepreneurs in our country.1610    With that, thank you all for being here, and this hearing1611is adjourned. Thank you.1612    [Whereupon, at 1:39 p.m., the hearing was adjourned.]1613    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]16141615                             [all]