VEDC and JPMorgan Chase Empower African American-Owned Small Businesses
(3BL Media/Justmeans) â There are 268,000 African American-owned small businesses in New York, Chicago and Los Angeles, making them among the top cities for African American-owned small businesses. Plus, with ownership of approximately 1.9 million, seven percent of small businesses nationwide, African Americans are the fastest growing segment of small business owners.Â These small businesses are a critical source for jobs and economic opportunity within their neighbourhoods. Without access to sustainable financing, they could miss growth opportunities or risk closure. Throwing these businesses a lifeline, VEDC and JPMorgan Chase & Co. have created a new lending program targeting African American-owned small businesses in New York City, Chicago and Los Angeles. JPMorgan Chase Foundation has given a $3 million grant to help VEDC reach its goal of creating a $30 million loan fund specifically for minority-owned businesses.
TheÂ National African American Small Business Loan FundÂ will boost economic opportunity for these businesses in the cities mentioned, helping to serve low-income communities by providing them with greater access to capital, technical assistance and financial consulting. Facilitated by VEDC, a California 501(c) 3 Community Development Financial Institution (CDFI), this new Fund will provide financing for businesses across all industries. VEDC has a 39-year record of providing business services to small businesses in low-and middle-income communities and especially in communities of colour; about 20 percent of VEDCâs existing portfolio serves the African American community
JPMorgan Chaseâs $3 million seed funding will help more small businesses and will help to narrow the lending gap. Business loans to African American entrepreneurs have yet to bounce back after the economic downturn in 2008. Also helping address this matter, theÂ National African American Small Business Loan FundÂ will provide short and long-term loans. Loan sizes will vary, but the average loan will range from $35,000 to $250,000. The JPMorgan Chase grant will allow theÂ National African American Small Business Loan FundÂ to provide loans and technical assistance and establish a loan loss reserve. This reserve will allow VEDC to expand its lending criteria to New York, Chicago and Los Angeles small businesses that traditionally did not qualify for a loan.
This new financing will increase access to the capital and assistance that African American entrepreneurs need most. Businesses receiving financing will be able to use the capital to expand, finance equipment, address short-term cash flow needs and provide contractor lines of credit. The Fund will also provide small business loan recipients with technical assistance such as networking, marketing, business plan development and financial consulting. Eligible small businesses must be majority-owned by African Americans.
Small businesses are the hearts of all neighbourhoods. They put people to work and create opportunity for families to make their way up the economic ladder. Now, VEDC and JPMorgan Chase are showing the power of the private sector to help cities tackle some of its biggest challenges. African American-owned small businesses are vital economic enginesÂ and when empowered, communities have new doors open to themâopportunities that they both need and deserve.Â
Photo Credit: VEDC