Companies owned by blacks and browns often face challenges in securing working capital. With that in mind, a coalition of about 30 financial institutions has launched a program to make loan funds available to minority-owned businesses.
Philadelphia’s Fund for Growth, Resilience, Independence and Perseverance (PHL GRIT Fund) builds the capabilities of Philadelphia’s Community Development Financial Institution (CDFI) and provides business counseling through professional services. The purpose is to increase access to.
“To solve this systematic problem where banks gathered in the area and couldn’t help the little black and brown owners because they didn’t have enough investment in Philadelphia’s CDFI ecosystem. Would you like to get everyone together? Varsovia Fernandez, Executive Director of the Pennsylvania CDFI Network, who helped organize the fund, said.
This effort was led by the Greater Philadelphia Financial Services Leadership Alliance (GPFSLC), which was formed last spring through efforts to get the economy back on track in a pandemic. The coalition aims to provide financing to 1,000 companies over the next four years.
In the first phase of the multi-year initiative, GPFSLC members have promised to invest $ 10 million in new capital for CDFI. CDFIs that receive additional direct investment in Phase 1 are Beech Capital, Entrepreneur Works, Enterprise Capital, WORC, Impact Loan Fund, Neighborhood Progress Fund, and Vested In.
Future phases of the project will provide support to large CDFIs such as Community First Funds, PIDC Capital and Reinvestment Funds, with additional capital to support this effort.
GPFSLC has set a goal of raising an additional $ 10 million in pooled philanthropy to build capacity for these CDFIs managed by the Pennsylvania CDFI Network. The network supports seven new CDFIs to enhance loan loss reserves and operations, including recruitment and training of new staff and technology upgrades to enhance the services offered to the business.
Banks have worked together to contribute to the capital components of GPFSLC’s GRIT fund. Fulton Bank has created loan participation agreements to enable regional banks, minority banks, and regional banks to contribute and maximize their investments.
Bank of America also contributed early on to Customer Bank, Fulton Bank, JP Morgan Chase, M & T Bank, PNC Bank, Univest, Wells Fargo and WSFS, promising an early leadership gift to seed a philanthropic fund. The Philadelphia Foundation’s Francis P. Kellogg Foundation has also promised to support GPFLSC’s activities. The effort also attracted a small number of depository institutions, the Bank of Asia and the United Bank of Philadelphia.
“We are all familiar with the fact that Philadelphia is leading the country in severe poverty. One of the factors associated with it from an economic point of view is a company owned by many minorities. But there are more challenges in raising and accessing the capital needed to prosper and survive. Coalition.
“All the various financial services companies that are part of this coalition are already deeply involved in investing in the community, but feel that the needs of the Philadelphia region are even more serious than in many other regions. A country where we all thought it was important to get together to find a way to do more collectively. “
“I want to make sure this isn’t a one-off fund,” he continued. “We are building a platform and fund that will be sustainable over the years to come.”
The new fund is welcomed by Trina Benjamin, the owner of the TWB Cleaning Contractor.
“I think this initiative is great,” said Benjamin, who specializes in providing commercial, construction and public space cleaning services. “There are other business owners like me who really need that support in building that infrastructure. Money from GRIT often experiences many challenges, so black and brown businesses I believe we can help. “
“Capital is always needed to reach the next level, including equipment, payroll, training, system and technology upgrades,” she continued. “I think the additional financial support from the CDFI and GRIT programs will really help SMEs reach the next level.”
Benjamin turned to Buna Capital in 2017 when he needed capital for salaries and equipment after winning a large contract.
“I went to the bank because I needed a lot of things to keep the deal. I went to the co-operative, but no one gave me money. I learned about beech. “
Beech Capital helped her improve her credit score, strengthen her financial position and get two loans. Benjamin said he was able to work with Buna Capital to prepare for the future potential to receive credit from banking institutions.
Kenneth Scott, President of Buna Capital, talked about the role CDFI plays in helping small business owners.
“We are actually trying to collaborate with people and build a community,” he said. “That’s the importance of the work that CDFI and Beech are doing.”
Scott said he thinks capital is very necessary.
“I see a lot of entrepreneurship happening,” he said. “Many people are thinking of new opportunities looking for funding for new ventures.”
Coalition Launches $ 100 Million Fund to Support Black and Brown Owners | Work
Source link Coalition Launches $ 100 Million Fund to Support Black and Brown Owners | Work