A common misconception persists in small business funding: when we say “capital,” we’re often really talking about debt. For most small businesses, including those served by the SBA, BBRC, and other lenders, what’s offered isn’t true capital—it’s debt, designed to facilitate specific activities but not to fuel transformative growth.
Here’s the distinction: capital supports long-term growth without the burden of immediate repayment, while debt must be repaid quickly, often limiting its effectiveness as a growth tool. When we say “access to capital,” we usually mean access to loans. But true capital, which doesn’t require immediate repayment, is rarely offered. This understanding is essential, especially as we consider ways to support not only high-growth startups but also mom-and-pop shops and microenterprises that traditional investors often overlook.
At the BBRC, we’ve experimented with “patient” forms of lending, offering loans that allow business owners time to see returns before repayment. While not capital in the strictest sense, these patient loans have proven invaluable for small business owners who used the funds to buy equipment, expand locations, and hire additional staff without immediate repayment pressure.
The results have been encouraging, reinforcing our belief that true capital—or capital-like solutions—could make a meaningful difference for small businesses, especially those historically underserved. As the SBA launches its new Capital Readiness program, we have an opportunity to spark conversations that not only encourage us to rethink our language but also inspire genuine solutions that bring true capital to small, micro, minority, and historically underutilized businesses.