August 6, 2025
Access to capital in the form of small business lending is one of many key financial investments required to build and sustain healthy neighborhoods, improve economic mobility for households, and create generational wealth. When restaurants, grocery stores, cafes, doctors’ offices, hardware stores, and other consumer and service amenities open and operate in a neighborhood, they become engines for job creation and attract new investments. Access to capital facilitates opportunities for entrepreneurs to launch businesses and build generational wealth that can be reinvested into the neighborhoods they call home.
In Maryland, on May 8, 2023, Governor Wes Moore signed into law the Access to Banking Act to promote the growth and availability of financial services in low- and moderate-income communities. The goal of the Act is to increase access to capital for small businesses and entrepreneurs in underserved neighborhoods. Additionally, in June 2025, Governor Moore established the Maryland Community Investment Venture Fund to enhance financial services for underserved communities and, later that month, officially designated 419 Census tracts as part of the 2024 Just Communities legislation with the goal of closing the racial wealth gap.
Given these new efforts to improve access to capital for underserved entrepreneurs, many of whom live and work in Baltimore City, this research should inform ongoing policy discussions and efforts at both the state and local levels to help drive investment and build a vibrant small business ecosystem in Baltimore’s Black Butterfly neighborhoods.
This study examines community level disparities in lending across Baltimore City in recent years and the racialized geography of banks’ small business lending in Baltimore by looking over a decade of the most recent publicly available data from 2013 to 2023. Specifically, it analyzes how banks have invested small business capital in Baltimore City’s Black Butterfly and White L neighborhoods.
Major findings from an analysis of small business lending in Baltimore between 2013 and 2023 include:
- White L neighborhoods received over $3.2 billion in small business loans compared to $1.3 billion in Black Butterfly neighborhoods.
- While the Black Butterfly contains almost two-thirds of the population of Baltimore City, those neighborhoods received less than one-third of the total small business loan amount that went to the city.
- The average White L neighborhood received almost five times the amount of small business loans than the average Black Butterfly neighborhood. This disparity has not improved over time.
- Of the top 35 neighborhoods ranked by total loan amount, all but four were in the White L. Among the 100 neighborhoods that received the least amount of investment, all but 10 were in the Black Butterfly.
- The Downtown neighborhood received nearly a half billion dollars in loans, making it the top neighborhood for small business lending. Other top neighborhoods included Canton Industrial Area, Pulaski Industrial Area, Mount Vernon, and Harbor Point.
- Excluding the neighborhood around the jail, Harlem Park received the least amount of loans of just over $600,000, or just over 1% of what Downtown received. Among other neighborhoods that received the least amount of investment were O’Donnell Heights, Harford-Echodale, and Coppin Heights.
- Although there was a significant lending disparity between White L and Black Butterfly neighborhoods, disparities between high poverty and low poverty neighborhoods were inconsequential.
This report is the second installment in a research series on investments in small businesses and entrepreneurship in Baltimore City. The first report in the series, The Historical Origins of Discriminatory Bank Lending in Baltimore by Lawrence T. Brown, PhD, MPA, explores the historical origins of citywide discriminatory bank lending and provides context for the present-day analysis presented here. Following reports in this series will include qualitative research by Yolanda Christophe, PhD, and Suntae Kim, PhD, on Baltimore entrepreneurs’ experiences engaging with financial institutions. Additional quantitative studies on Small Business Administration lending programs and bank branch locations in Baltimore City add color to these investigations.