In addition, new innovative intermediaries - such as community development corporations and multibank and investor loan pools - are seeking to develop expertise in specific segments of the marketplace for small and minority businesses. I would like to emphasize, however, that credit alone is not the answer for small businesses. They must have equity capital before they are considered viable candidates for debt financing.
Equity acts as a buffer against the vagaries of the marketplace, and it is, accordingly, a sign of the creditworthiness of a business enterprise and the commitment of its owner. This is especially true in lower-income communities, where the weight of expansive debt obligations on small firms can severely impede growth prospects or more readily lead to business failures.