By Ginger Gibson
WASHINGTON (Reuters) - Democratic presidential hopeful Elizabeth Warren is proposing creating a $7 billion fund to provide grants to help more minorities start their own business, she announced on Friday.
"The playing field is tilted against entrepreneurs of color," Warren, a U.S. senator, wrote in a post on Medium.com announcing the proposal. "The small business gap is another example of how the racial wealth gap in America holds back our economy and hurts Black, Latinx, Native American, and other minority families and communities."
Warren is scheduled to appear on Saturday at the Black Economic Alliance Forum in South Carolina, where she will campaign along with several other presidential hopefuls.
Warren is one of 24 Democrats competing for the party's nomination to challenge Republican President Donald Trump in the November 2020 election.
The fund would provide grants - not loans or loan guarantees - to minority entrepreneurs, Warren is proposing.
"Current government policies focus on providing access to credit to entrepreneurs, but loans aren't as good as no-strings-attached equity because they leave businesses with debt when they're trying to grow," Warren wrote.
Warren would have the program administered by state and local governments.
Those who applied for grants would be required to qualify for the existing Small Business Administration’s existing 8(a) program and to have a household income of less than $100,000.
Additionally, Warren wants to require the states and local governments administering her program to hire more minority investment managers.
Warren said she would pay for the program through her "ultra-millionaire tax" on wealth over $25 million.