Why are Abbott and LISC investing in diversifying the supply chain?
There's a need for greater diversity in the healthcare supply chain, but many diverse small business owners – including people of color, women and other underrepresented groups – may not have access to the resources they need to expand capacity and build systems at scale. As a result, they cannot take on larger supplier contracts that can potentially advance their companies.
LISC and Abbott’s $37.5 million initiative will provide diverse small business owners with the tailored solutions, support and resources they need to compete, grow and create jobs. By providing targeted support, Abbott and LISC are working to build a stronger, more diverse healthcare supply chain, as well as healthier local economies and communities.
What challenges will this initiative help diverse-owned small businesses overcome?
Becoming a supplier for Abbott and other large healthcare companies can be a game changer for a small business. But inequitable access to capital leaves many diverse small business owners – including people of color, women and other underrepresented groups – without the capacity to participate as a supplier. The Abbott-LISC initiative addresses that longstanding gap by offering growth capital, loans and coaching to owners from diverse backgrounds. With this support, owners will have the opportunity to grow their companies into larger, more sustainable operations, which spurs job creation and intergenerational wealth-building in underinvested communities, while bringing greater diversity to the healthcare supply chain.
How much are Abbott and LISC each committing to this initiative?
This is a $37.5 million initiative. Abbott is contributing $25 million, including $12.5 million in loan capital and $12.5 million in grants to LISC to provide investment funding and targeted support. LISC is matching the investment with an additional $12.5 million in loan capital.
Who is eligible to receive growth capital, loans and training?
The Abbott-LISC initiative is open to companies nationwide with a focus on diverse-owned small businesses. Diverse-owned include those that are majority owned by people of color (including Black, Latino, Asian and Native American business owners), women, veterans, people with disabilities, people who identify as LGBTQ, and other historically underrepresented groups. A small business must meet the following criteria to be eligible for the initiative:
- Based in the United States, with an annual revenue of $250,000 or more;
- In operation for more than two years, with an ability to deploy capital toward business improvement and growth; and
- Part of the healthcare industry, with a focus on manufacturing diagnostics, nutrition products, medical devices and other healthcare technologies, or offering business-to-business products and services that the healthcare industry can use such as IT, human resources, and construction, among others.
Sole proprietors are not eligible for the program.
How can a small business apply for this initiative?
Small businesses interested in participating are invited to complete an intake form, which is a key step in the client journey for this initiative. Small businesses may also contact supplierdiversity@lisc.org.
Is this just for suppliers of Abbott?
No, this initiative is open to diverse small businesses that could potentially become suppliers for the broader healthcare industry.
Is the focus on helping established diverse businesses, or small startups?
This initiative will focus on supporting diverse small businesses in operation for more than two years, with an annual revenue of $250,000 or more and an ability to deploy capital toward business improvement and growth. Sole proprietors are not eligible for the program.
How many companies will you help?
The initiative has the capacity to provide tailored support for a few hundred diverse small businesses. The actual number will depend on the specific needs of the participating companies.
Any specific markets or geographic focus?
To be eligible, a small business must be based in the U.S.
Why does the Abbott-LISC initiative focus on diverse small businesses?
The healthcare industry – including supply chains – should reflect the diverse communities we all serve, but significant gaps remain. According to the U.S. Census Bureau, only 19% of U.S. businesses are owned by people of color and 21% are owned by women, despite representing 40% and more than half the population, respectively. The goal of the initiative is to build a more diverse healthcare supply chain while contributing to broader economic and health equity in local communities. Many diverse small-business owners – including people of color, women and other underrepresented groups – may not have access to resources to expand capacity, build systems at scale or access capital for their businesses to survive and thrive. As a result, they cannot take on larger supplier contracts that can potentially advance their companies. The Abbott-LISC initiative will deliver capital and technical services to address these barriers, which will enable small business owners from diverse backgrounds to better compete for contracts, hire more staff, and fuel economic opportunity in the communities where they operate.
Why is this just for companies in healthcare industry?
Building a stronger, more diverse healthcare supply chain is the goal of the initiative. To this end, LISC and Abbott will support diverse-owned small businesses that are either 1) part of the healthcare industry, with a focus on manufacturing diagnostics, nutrition products, medical devices and other healthcare technologies; or 2) offering business-to-business products and services that the healthcare industry can use such as IT, human resources, and construction, among others.
What information does LISC need from small businesses that want to access growth capital or a business loan?
Small businesses will need to provide some standard business documentation such as the following (with variation depending on the type of loan or growth capital plan):
- Personal Tax Return
- Business Tax Return
- Interim Financial Statements (e.g., Profit and Loss Statement, Balance Sheet)
- Personal Financial Statements
- Business Debt Schedule
- Certificate/Articles of Incorporation (Corporation) or Organization (LLC)
- W-9
- Employer Identification Number (EIN) assigned by IRS
What kind of due diligence does LISC conduct on a small business before deploying capital?
LISC verifies the background of both the business and the business owner(s). For its due diligence checks, LISC uses a program that accesses billions in public data records. Small businesses must provide consent and share business/personally identifiable information for LISC to conduct the due diligence. LISC reviews information such as:
- Corporate filings
- Global and U.S. sanctions
- Affiliations
- Bankruptcies
- Fraud alerts
- Criminal records
- Arrest records
- Civil suits
- Death records
- Business registrations
- Professional licenses
- Credit reports