You’re an entrepreneur interested in getting a business loan. That shouldn’t be a problem, right?


That is unless you’re African American, Hispanic, Asian, Native American, or of any other minority status…

Findings from a report by the U.S. Department of Commerce Minority Business Development Agency (MBDA) cite data dating back as early as 1997, exposing the inequality of funding for minority and non-minority businesses. In the report, officials from the Agency address the primary barriers faced by minority entrepreneurs decades ago. Regrettably, they are the same challenges many minority business owners in the Lehigh Valley still face today.

Vendetta Hines, owner of The Lift Center. Photo Credit: Stay Calm Industries

The MBDA study showed that compared to non-minority businesses, minority-owned firms were:

-More likely to avoid applying for business loans due to rejection fears
-More likely to be denied loans
-More likely to receive higher interest rates if/when a loan is administered
-More likely to receive smaller loan amounts

More recently, the U.S. Small Business Association (SBA) Office of Advocacy in 2020 published a study. The findings were consistent with the MBDA report from decades earlier- providing figures that minority business owners are still disproportionally affected by limited access to capital.

As we continued digging into the experiences of minority entrepreneurs, current data shed light on even further disparities in an article shared by the Minority Business Development Agency. It’s reported that White entrepreneurs were seven times more likely to obtain loans compared to entrepreneurs of color just a few years ago. In contrast, business owners of color are the ones currently leading new business ventures. Gusto, a small business support services provider, surveyed over 1,500 new businesses*, finding that “New business owners in 2020 are much more likely to be Black, Hispanic or Latinx and female than comparable data of new businesses in past years. For instance, only 3% of new business owners were Black or African American in recent years, but that number rose to 11% in 2020. Similarly, 49% of entrepreneurs in 2020 were women, compared to 27% in recent years.”

Both historically and presently, minority business owners struggle for equal access to capital compared to white entrepreneurs. While the U.S. Minority Business Development Agency is one of the organizations working to bring attention and resources to mitigate these disparities, it’s facing similar challenges. Even the MBDA, the organization that set out to assist minority business owners, is currently underfunded.

So, the question stands: How can we alleviate disparities between minority and non-minority-owned businesses?  


The answer: By supporting business owners through programs designed specifically for minorities.  



The Montoya family at their real estate closing alongside David Dunn.

Enter: The Pennsylvania Minority Business Development Authority Loan Fund (PMBDA) 

Since 2017, seven Lehigh Valley minority business owners have received loans through the PMBDA program, a loan fund administered by AEDC. In that time total loans outstanding increased from $300,000 to $1.2 million, and minority and/or disadvantaged entrepreneurs were able to create over 100 jobs using the funding. Minority business owners find the PMBDA program attractive because, unlike banks, AEDC offers competitive fixed rates for up to 15 years, depending on the type of loan.

Much of the increase in AEDC’s loan administration occurred shortly after Program Manager David Dunn joined the team. Dunn’s experience running two of his own companies, working at Lehigh University’s Small Business Development Center, and his active involvement in the local business community serve as a resource for local business owners. Due to Dunn’s assistance paired with AEDC’s Loan Committee and Board support, Lehigh Valley entrepreneurs are being matched with lending sources and necessary capital.

Boots on the ground

Local business owners like Camilo Montoya, Rafael Lovera, Vendetta Hines, Dr. Kyle Flanigan, and Raj Pawar have benefited from the PMBDA program. Still, many more minority businesses in the area need access to capital. AEDC staff is currently prioritizing the marketing of the loan program to the business community through connections with regional minority-focused business groups, including the Black Business News Network and The Hispanic Business Network. Staff members are reaching out by presenting at Rotary events and attending minority-focused community business development events (as permitted by COVID-19 restrictions).

AEDC has also partnered with long-time supporter PPL Corporation to increase relations with minority business owners through its Sustaining Grant fund. The PPL Foundation awarded grant funds to select non-profits with a focused effort on diversity, equity, and inclusion. AEDC will utilize our funds to develop and distribute additional information to raise awareness of this program.

How are Lehigh Valley loan recipients utilizing PMBDA funds? 


Camilo Montoya: Small business owner Camilo Montoya knew he needed capital to purchase a larger facility to expand the capacity of his auto repair shop. It took just two months for Montoya to apply for PMBDA financing and close on a new property, scaling a third of an acre, The property includes both a commercial garage facility and a newly renovated home for his family. As part of the loan terms, Camilo and his wife agreed to live in the residence and operate the business out of the adjacent garage for the duration of the loan.

Rafael Lovera: Early-stage investor Rafael Lovera was preparing to purchase and renovate his second building in Allentown and required a lender. A long-time Allentown resident and seasoned business operator, Lovera was also a previous client of AEDC, so he knew where to look when traditional bank financing wasn’t an option. In addition to lending, AEDC assisted with other aspects of the project, including coordination between the city and his contractors. With the help of a PMBDA loan, Lovera was able to finance the purchase of a building on West Susquehanna Street, which he restored to hold a bodega on the first floor and an apartment on the second floor.

Vendetta Hines: Vendetta Hines, owner of the LIFT Center, utilized PMBDA funds to purchase a former manufacturing building in South Allentown. Ms. Hines directed over $2 million in renovation work to complete the facility, an adult day care for persons with intellectual disabilities. The business has grown from a few workers to 76 full-time workers and is expected to grow to 100 employees by the end of 2021.

Dr. Kyle Flanigan of U.S. Specialty Formulations: U.S. Specialty Formulations owners Kyle Flanigan and Garry Morefield were ready to expand their small-batch, specialty formulations manufacturing, leading them to search for a larger facility. The partners worked with the staff at AEDC and LVEDC to successfully identify and purchase a 41,000 square foot building in South Allentown with the assistance of a PMBDA loan. The manufacturer has grown from six to 14 full-time workers at the close of 2020 and expects to grow to 30 employees by the end of 2021.

Summit Utility Structures: Summit Utility Structures owner Raj Pawar utilized loan funds to purchase equipment and machinery for his steel fabrication company. The company has grown from 17 employees to 74 full-time workers since the loan was first administered.

*AEDC contacted Gusto to retain information on the locations of the businesses polled. 10% of the respondents were located in California, while the remaining 90% were spread throughout the rest of the United States and D.C.

What type of loan options are available? Under the Urban Made program, loan applicants have access to three local funds for up to $100,000: The City of Allentown Enterprise Zone Loan Fund, The City of Allentown Economic Development Loan Fund, and The Allentown Development Corporation Loan Fund. The options for borrowers don’t just end there. AEDC also administers a Revolving Loan Fund Program for the Pennsylvania Minority Business Development Authority (PMBDA). Applicants who qualify as socially or economically disadvantaged minorities can apply for up to $250,000 in financing through the PMBDA loan program. 

Lauren Matthews

PMBDA Loan Program in the News