Oregon law expands access to capital for disadvantaged businesses

By Kate Davidson (OPB)
Aug. 9, 2021 5:43 p.m.

“The community is desperate for programs like this,” said one of the law’s supporters.

Oregon Gov. Kate Brown has signed a bill to help underserved business owners access capital more easily.

Brown testified in support of an early version of the concept, a priority of her Racial Justice Council. “Our budgets, policy agenda, and priorities should reflect, support, and honor the communities who have been most deeply impacted by systemic racism,” she said in her prepared remarks.


House Bill 2266 won bipartisan support from lawmakers.

The law creates two funds — $10 million each — to help historically disadvantaged business owners get loans.

The first fund provides a backstop to community lenders who work with small businesses that face barriers getting conventional loans. One common hurdle is collateral, which is often tied to intergenerational wealth.

“Your house,” said Ashley Henry, the executive director of Business for a Better Portland, which pushed for the legislation. “Owning a home is probably one of the biggest examples of that.”


Decades of racist lending practices made it harder and more expensive for Black Americans and other people of color to buy homes, feeding the country’s persistent racial wealth gap.

Related: Portland took these Black families’ homes. Some of their descendants want reparations.

“If you are someone who lives in a rural community or someone who is a business owner of color and you’ve historically been marginalized from our economic system, and you don’t have access to that intergenerational wealth, there’s a pretty good chance that you’re not going to have that collateral that a lender would want to see,” Henry said.

To address that, the law allocates $10 million to reimburse community lenders if loans they make to disadvantaged businesses fail. Lenders who apply for the money will have to show how the extra cushion would help increase their loans to rural or underserved entrepreneurs. Lenders must also explain how their underwriting criteria would reduce historic barriers.

The second part of the law creates a $10 million fund to award loans directly to disadvantaged and emerging small businesses. Businesses owned by women, people of color, and service-disabled veterans are also eligible. Each loan should be paired with technical assistance. The program will be administered by Business Oregon.

“The direct loans to the businesses is critical,” said Kenechi Onyeagusi, executive director of Professional Business Development Group, a trade association of women and minority-owned firms in the construction industry. “The community is desperate for programs like this.”

Onyeagusi advocated for the law along with other members of Oregon Small Business United. She described the measure as “fantastic” but added there was still work to be done.

“It’s never enough,” Onyeagusi said of the $10 million revolving loan fund. “Left to me, we would have $100 million in that pot. But it’s a start.”