JPMorgan Chase has announced the launch of a five-year, $350 million initiative to grow small businesses owned by Black, Latinx, and women entrepreneurs; create a more inclusive recovery from the COVID-19 pandemic; and address the racial wealth gap.
Part of the bank's $30 billion commitment to create economic opportunity in underserved communities and advance racial equity efforts, the pledge includes low-cost loans and equity investments, support for policy solutions aimed at improving Small Business Administration programs, and philanthropic investments. Building on the company's Small Business Forward initiative, which was launched in 2015, the new effort will work to reduce barriers to capital for underserved small businesses by providing support for their immediate needs as well as long-term growth. More than 40 percent of the $350 million will be in the form of low-cost loans and equity investments, addressing a critical barrier to success for Black, Latinx, and women entrepreneurs.
As part of the effort, JPMorgan Chase will partner with the Local Initiatives Support Corporation and other community development financial institutions (CDFIs) to expand the Entrepreneurs of Color Fund, which currently operates in five U.S. cities. To that end, the bank will invest $42.5 million to scale the program to additional U.S. cities in 2021, with the aim of creating a nationwide program that provides low-cost loans and technical assistance to minority-owned small businesses over time.
"Even in strong economic times, minority-owned businesses are more likely to struggle to access appropriate financing than their white counterparts," said Steve Hall, LISC's senior director of small business lending. "That not only affects owners and their families; it means the communities where they operate have more limited access to goods, services, jobs, and economic growth. JPMorgan Chase is helping bridge that gap, while also helping these entrepreneurs prepare to successfully emerge from the losses of the pandemic."