BOSTON — One of the biggest problems small entrepreneurs have had starting marijuana businesses in Massachusetts is a lack of money. Starting a business is expensive, and traditional loans and financing options are generally not available because of federal prohibition.

State senators will decide this week whether to take the first step toward creating a no-interest loan fund managed by the state to help marijuana entrepreneurs get their businesses off the ground.

The fund would be available only to social equity and economic empowerment applicants, designations given by the Cannabis Control Commission to applicants from communities that were disproportionately impacted by marijuana prohibition and enforcement.

Sen. Sonia Chang-Diaz, D-Boston, Senate chair of the Joint Committee on Cannabis Policy, introduced the amendment to be considered during the Senate’s fiscal 2020 budget debate this week.

Chang-Diaz said the top barrier social equity applicants have faced is access to capital. She said lawmakers wrote into the state’s marijuana law the need to “make sure it’s an industry that benefits Massachusetts residents, not just multi-state corporations” and that benefits communities disproportionately harmed by the War on Drugs.

“I’m looking for feedback from the CCC and the field, if we’re not hitting the mark, what else needs to happen?” Chang-Diaz said.

The Cannabis Control Commission began discussing the idea of a state-run loan fund as part of a larger discussion in February about how to improve access to the industry for social equity applicants. So far, most marijuana licenses have been granted to larger companies, with little diversity.

Of nearly 350 license applications submitted as of early April, only five had priority status as “economic empowerment” applicants. Over 300 of the applicants did not identify as a “disadvantaged business enterprise,” which includes categories like women and minority-owned businesses.

Cannabis Control Commission Chairman Steven Hoffman said in February that he has been talking to banks, charitable foundations, wealthy individuals and the industry about ways to help small and minority business owners access financing. He also agreed to explore the possibility of asking the Legislature to create a program that would offer grants or interest-free loans to equity participants – potentially similar to existing programs that help inner city entrepreneurs.

Chang-Diaz’s amendment would allocate $1 million to start a Cannabis Social Equity Loan Trust Fund. The money would have to be matched by private donations.

Going forward, the amendment proposes that the fund would be paid for with 10% of revenue the state gets from marijuana excise taxes and private donations.

The fund’s regulations would be written by the Cannabis Control Commission. It would be administered by the secretary of housing and economic development.

Asked about concerns that taxpayers could be on the hook if a business fails, Chang-Diaz said state officials could establish qualifications for eligibility to make sure the state is taking “reasonable risk.” Certain amounts of money could be reserved for different phases of the licensing process.

Chang-Diaz said Massachusetts has the country’s strongest law in terms of ensuring the industry will benefit communities hurt by marijuana enforcement. “We should be proud of that, but we have to actually make sure we’re getting there,” she said. “That it’s not just words on paper, we’re actually achieving the goals the Legislature rightly articulated last session.”