WASHINGTON – Yesterday, in a House Financial Services Subcommittee Hearing, Congresswoman Ayanna Pressley (MA-07) discussed how our traditional infrastructure investments have exacerbated the racial wealth gap and how we must help minority-owned businesses access critical infrastructure funding and contracts in order to set the groundwork for a just and equitable economic recovery.
A transcript of Rep. Pressley’s exchange with Ms. McGuire is below, and the video is available here.
Transcript: At Hearing, Pressley Discusses How Past Infrastructure Investments Have Contributed to the Racial Wealth Gap
February 3, 2022
REP. PRESSLEY: As has been stated, and we know but it bears repeating, that for too long our traditional infrastructure investments and policies have really exacerbated inequities and disparities in our communities. In fact, the 1956 Interstate Highway Act which created the cross-country system of freeways that we rely on every day resulted in the displacement of more than 1 million people and more than 475,000 families in just two decades. These highways cut through our neighborhoods, they darken pedestrian routes, they worsen air quality, and they massively diminished property values, predominately Black, brown, indigenous and low-income communities. We lost churches, we lost greenspace, and entire swaths of homes. Our communities lost access to jobs and other critical resources – divestments that to this very day contribute to the growing racial wealth gap in our nation. Ms. McGuire, what role does taking on debt play in serving as a barrier for minority-owned businesses in this space?
YING MCGUIRE: Thank you for the great question. So, as I shared earlier, as a business owner, we don’t want to take on more debt loan. So, the critical key to success is allow and give access to equity capital and government capital and enable them to grow.
REP. PRESSLEY: Very good. And can you just expound upon that a little bit more as to what are some alternatives to loans that will help minority-owned businesses acquire the capital in order to be competitive for these contracts that we have historically been locked out of?
YING MCGUIRE: Absolutely. So, one thing is, you know, we can partner with some of the large financial institutions, and many of them are corporate members. They’re vital, critical stakeholders that can really extend funding opportunities and really lifeline to these minority, small businesses, and all of them made commitment to racial equity. We talked about racial wealth gap and all of them made racial equity commitment to provide funding for infrastructure contracts and more and this can be accomplished by using the racial-equity commitment and socio-funding to guarantee loans for MBE required to secure the contract. One example, very actionable example, is you know, create a letter of intent for MOU that states if MBE wins contract, we will guarantee a loan to cover, you know, 100 days of payroll. That’s one example. The other thing is not just about access. It’s the burden of getting the capital, the underwriting criteria should be evaluated and many small MWBE just don’t have the financial acumen to receive the loans or equity capitals from different sources. And so help MWBE understand the requirement and create a path to success will be ideal. And the other thing I think for many people talk about it is the connection. You know people don’t have a relationship nor the knowledge to gain access to capital. So how do we, the government and a community organization like us, become a matchmaker to connect our underserved communities with a source of a capital out there, and one of the ways to do it is through technology enablement?
REP. PRESSLEY: Thank you. Thank you, Miss McGuire. I’ll let you go on. Go on, please.
YING MCGUIRE: So, what if, you know, we have a tool that has all sorts of capital out there and intelligently match with a small, minority, woman businesses who otherwise never had the access or relationship and that can be easily created with AI with, you know, today’s technology advancement? Thank you for the question.
REP. PRESSLEY: No, absolutely. And I think it just goes to show this is about intention, and the will and the solutions are available to us. And on the technical assistance side, as you talk about sort of the barriers in terms of relationships and access and acumen and why mentorship is so important and that we’re intentional, you know, in our lawmaking and ways to support that. You know, many of the folks that I hear from back in my district, the Massachusetts Seventh Congressional District, they just don’t have extra revenue lying around to hire expensive consultants and accountants to application. So many words, they simply won’t be ready, but I do thank you so much. At the end of the day, you know, infrastructure in its development, its implementation has the potential to divide or to bridge, to reinforce oppression or to dismantle it, and we have to learn from the lessons of the past and chart a better course. Thank you.