VEDC / JP CHASE MORGAN
THE NATIONAL AFRICAN AMERICAN SMALL BUSINESS LOAN FUND
A lending program to boost economic opportunity for minority-owned businesses and help them serve low-income communities
In 2015, VEDC and JPMorgan Chase & Co. announced a new lending program for African American-owned small businesses in New York City, Chicago and Los Angeles. The National African American Small Business Loan Fund will boost economic opportunity for minority-owned businesses in these cities and help them serve low-income communities by providing them with greater access to capital, technical assistance and financial consulting. JPMorgan Chase Foundation contributed a $3 million grant to help VEDC reach its goal of creating a $30 million loan fund.
Facilitated by VEDC, a California 501(c)3 Community Development Financial Institution (CDFI), this fund provides financing for businesses across all industries. By providing the initial grant to seed the Fund, JPMorgan Chase helped VEDC launch the program in support of small businesses that are a critical source of jobs and economic opportunity in their neighborhoods, but can often be credit-impaired and unable to qualify for traditional capital. Without access to sustainable financing, these businesses may miss a growth opportunity or risk closing their operations.
The National African American Small Business Loan Fund provides short- and long-term loans. Loan sizes vary, but the average loan may range from $35,000 to $250,000. The JPMorgan Chase grant allowed the National African American Small Business Loan Fund to provide loans and technical assistance and establish a loan loss reserve. This reserve helped VEDC to expand its lending criteria to New York, Chicago and Los Angeles small businesses that traditionally may not qualify for a loan.
Businesses receiving financing are able to use the capital to expand, finance equipment, address short-term cash flow needs and provide contractor lines of credit. The Fund also provides 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.
“We know that mission lenders hold the key in providing a sustainable source of capital to minority borrowers and those that have been left out of the economic mainstream,” said Grady Hedgespeth, Director of U.S. Small Business Administration Office of Economic Opportunity.
Learn more at vedc.org/press/vedc-jpmorgan-chase-announce-loan-fund-african-american-small-businesses
