JPMorgan Chase and Local Initiatives Support Corporation (LISC) have made a $ 2.65 million commitment to provide capital and resources to colored entrepreneurs in Los Angeles.
Los Angeles has the largest small business economy in the United States, with over 250,000 small businesses.
However, these small businesses lack capital and colored entrepreneurs are disproportionately affected.
The Entrepreneurs of Color Fund (EOCF) program was launched in Los Angeles earlier this month to address this shortcoming. With $ 2.65 million in funding to support historically disadvantaged small business owners in Los Angeles, the fund is designed to help increase the availability of capital and business resources to empower small businesses owned by underserved entrepreneurs.
“Our goal is to build an inclusive economy,” said Jenn Piepszak, Co-CEO of Consumer & Community Banking at JPMorgan Chase at the fund’s launch event at the Chase Community Center branch in the Crenshaw district.
She added, “We know that blacks and Latin Americans in particular have missed our country’s growth and prosperity for too long.”
EOCF is a national collaboration with the Local Initiatives Support Corporation (LISC), a network of Community Development Financial Institutions (CDFIs), JPMorgan Chase and other donors.
To date, EOCF has issued over 1,200 loans and raised more than $ 43 million in capital to colored entrepreneurs in cities such as Detroit, the Bay Area, South Bronx, Chicago, and greater Washington.
Los Angeles is now the sixth city served by the program and, according to JPMorgan Chase, while Blacks and Latinos own 8% and 49% of Los Angeles County’s population, respectively, they own only 2% and 11% of all businesses, respectively.
Diedra Porché, managing director of Chase, who heads the bank’s small business banking operations in California, explained at the event that Los Angeles’ past loan capital has consisted of microloans less than $ 100,000 or more than 250,000 US dollars has been concentrated, creating a “missing center” for many small businesses. She noted that the program will help address these “critical” needs.
Los Angeles County’s small business capital landscape is marked by a significant lack of capital to meet small business needs and disproportionately low traditional lending rates in neighborhoods with high concentrations of black and Latinos, according to additional figures from JPMorgan Chase. As a result, Los Angeles County has unmet small business demand of $ 60 billion annually.
“When we started our business, we used our own money, our own credit cards, without knowing that there were financial instruments and products that would have helped our business grow. Programs like this will help color businesses get smarter, scale, and grow bigger, ”said Joe Ward-Wallace, co-owner of South LA, who also spoke at the event.
The $ 2.65 million funding for the Los Angeles EOCF program is a JPMorgan Chase grant to support five differently run CDFI organizations that work together to administer the program with local small business borrowers carry out.
The Office of Local Initiatives Support Corporation (LISC LA), the Accion Opportunity Fund (AOF) and Inclusive Action for the City (IAC) will each provide supplemental loan capital to meet the needs of EOCF LA borrowers.
The other two participating organizations, Vermont Slauson Local Development Corporation (Vermont Slauson) and the Pacific Asian Consortium in Employment (PACE), will provide technical support and business advisory services to EOCF Los Angeles borrowers.
“EOCF LA is a key component of the inclusive credit model we have for retarded entrepreneurs,” said Tunua Thrash-Ntuk, Executive Director of LISC LA, who also spoke at the event.
Thrash-Ntuk added, “Partnerships like this will enable many community actors to raise the resources to help small business owners rebuild, improve their credit scores, increase their financial stability and hopefully, by the end of the journey, thrive sustainable businesses . “.”
EOCF Los Angeles funding is part of JPMorgan Chase’s $ 30 billion.
“We know there are great ways to raise more capital for businesses by working closely with local community organizations,” said Porché. “It will be difficult to rebuild our main roads after the pandemic, but one of the best ways to start rebuilding will be programs like this.”