NEW YORK - Bags, a small business loan discovery and management platform, announced today the close of $3M in Seed financing as part of its continued effort to increase affordable funding options for diverse and women-owned businesses. The fintech company's oversubscribed round was led by Slauson & Co with participation from Connecticut Innovations and Schultz Family Foundation's Entrepreneurs Equity Fund, following on previous investments from Altrinsic Global Advisors and angel investors Tim Armstrong, Owen Van Natta, Edith Cooper, and André Swanston, among others. The funds will be used to expand the capabilities of the Bags platform with debt management features and data infrastructure solutions for lenders.
There are 9.2 million minority-owned small businesses and 11.7 million women-owned small businesses in the US, and these segments are fast growing. Yet 99% of businesses will never raise venture capital, and, according to the Minority Business Development Agency, minority-owned businesses are less likely to be approved for financing than white business owners with the same annual receipts. In the current rising rate environment, diverse and women-owned businesses need access to fair funding that is hard to find through existing channels and unavailable from traditional institutions.
With Bags, formerly known as AMP Community, diverse business owners discover the best non-dilutive ways to secure funding. Bags helps entrepreneurs get the working capital that they need, understand the implications of debt financing, and manage their repayment process, all with lenders that have a vested interest in supporting the community the business aims to serve.
"Access to capital is a core part of long-term small business success, and our mission is to provide underserved businesses with a clear path to fair financing with the tools they need to manage it. We help diverse folks avoid predatory lending by meeting them where they're at, in a way that they relate to, and with what they need," said Bags CEO Daniel Taylor. "Community, Culture, and Cash are at the center of all of our efforts, and we aim to ensure that millions of businesses can focus on building wealth and strengthening their local economies without worrying about where investment will come from."
The platform is thoughtfully designed to reduce time and friction in the loan application process with integrated, contextualized education and detailed guides for earning loan approvals to secure funding. Bags is committed to providing only the best options, pre-qualifying businesses for loans from mission-driven lenders, including many non-profit CDFIs with a commitment to put cash in the community.
"The Bags team has a deep commitment to fair and flexible financing for millions of small businesses. They fill a key need that will enable small businesses to compete and serve the nuances of their communities," said Austin Clements, Partner at Slauson & Co. "Bags achieves for small business owners what we aim to achieve as investors: economic inclusion and democratized access to entrepreneurship for underrepresented founders."
Based on data from the Congressional Black Caucus, the median net worth for Black business owners was 12 times higher than for Black non-business owners in 2019. According to the Hispanic Wealth Project, Latino business owners have a median net worth five times that of Latinos overall. Growth in Latina-owned employer businesses accounted for nearly all (93 percent) of the growth in women-owned employer businesses between 2017 and 2018. These data show the power of entrepreneurship to advance wealth building among diverse populations, and the Bags mission is to increase access to entrepreneurship to create stronger local economies, better jobs, and generational wealth.
Since 2021, Bags has helped hundreds of business owners get 100% free access to the right financing for their company. The platform includes lending options from $10K to $5M, with industry-low interest rates and flexible terms. With funding approval rates for entrepreneurs connected through the platform far outperforming industry benchmarks, Bags has helped put over $5 million into small businesses since 2021, including lifestyle luxury brand M65 Studio, founded by Anthony Hendrickson, and Droplet, a wellness beverage brand created by Celeste Perez.
The Seed round brings total funding for Bags to $4M. The company is led by Taylor and co-founders Ignacio Semerene and William Hayden.
To learn more about Bags and the work they are doing to help diverse business owners have an equal shot at success through access to capital, visit their website SecureBags.com or follow them on social media @Secure_Bags.
Bags is a loan discovery and management platform, built by and for the culture. We connect diverse and women-owned businesses to equitable lenders at the lowest interest rates in the market, saving small business owners time and money so they can get to building. Our partners are impact-driven lenders who leverage our platform to increase loan origination and approval rates for underrepresented entrepreneurs, unlocking economic potential in diverse communities.